WASHINGTON (dpa-AFX) - Stocks have climbed well off their lows of the session but continue to see modest weakness in mid-day trading on Wednesday. With the drop on the day, the major averages are pulling back further off Monday's record closing highs.
Currently, the major averages are posting slim losses. The Dow is down 36.17 points or 0.1 percent at 27,299.46, the Nasdaq is down 3.73 points or 0.1 percent at 8,219.07 and the S&P 500 is down 6.65 points or 0.2 percent at 2,997.39.
The modest weakness on Wall Street may partly reflect renewed uncertainty about the near-term outlook for interest rates following the release of disappointing housing data.
Before the start of trading, the Commerce Department released a report showing a bigger than expected drop in housing starts as well as a nosedive in building permits.
The Commerce Department said housing starts slid by 0.9 percent to an annual rate of 1.253 million in June after slipping by 0.4 percent to a revised rate of 1.265 million in May.
Economists had expected housing starts to fall by 0.6 percent to a rate of 1.261 million from the 1.269 million originally reported for the previous month.
The report also unexpectedly showed a substantial pullback in building permits, an indicator of future housing demand.
Building permits plunged by 6.1 percent to an annual rate of 1.220 million in June after climbing by 0.7 percent to a revised rate of 1.299 million in May.
Economists had expected building permits to rise by 0.5 percent to a rate of 1.300 million from the 1.294 million originally reported for the previous month.
With the much steeper than expected drop, building permits fell to their lowest level since hitting a rate of 1.201 million in May of 2017.
Trading activity has remained somewhat subdued, however, as traders stick to the sidelines as they wait for the earnings season to pick up steam being making more significant bets.
Shares of Bank of America (BAC) have moved notably higher after financial giant reported second quarter results that beat analyst estimates on both the top and bottom lines.
United Airlines (UAL) has also moved to the upside on the day airline reported better than expected second quarter results.
Traders may be looking ahead to the release of results from companies like IBM Corp. (IBM), eBay (EBAY), and Netflix (NFLX) after the close of trading.
Honeywell (HON), Morgan Stanley (MS), UnitedHealth (UNH), Microsoft (MSFT), Capital One (COF), and American Express (AXP) are also among the companies due to report their quarterly results in the coming days.
Sector News
Most of the major sectors are showing only modest moves, although transportation stocks are pulling back sharply following the rally seen in the previous session.
After jumping 1.8 percent to a two-month closing high on Tuesday, the Dow Jones Transportation Average has plunged by 2.8 percent.
CSX Corp. (CSX) is leading the sector lower after the rail operator reported weaker than expected second quarter earnings and slashed its full-year revenue forecast.
Significant weakness also remains visible among oil service stocks, as reflected by the 1.5 percent drop by the Philadelphia Oil Service Index.
The weakness in the oil service sector comes as the price of crude oil for August delivery is sliding $0.27 to $57.35 a barrel.
On the other hand, gold stocks have shown a substantial move to the upside over the course of the session, driving the NYSE Arca Gold Bugs Index up by 2.8 percent.
Gold stocks are moving higher along with the price of the precious metal, with gold for August delivery jumping $12.80 to $1,424 an ounce.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while China's Shanghai Composite Index dipped by 0.2 percent.
The major European markets also moved to the downside on the day. While the French CAC 40 Index slumped by 0.8 percent, the German DAX Index slid by 0.7 percent and the U.K.'s FTSE 100 Index dropped by 0.6 percent.
In the bond market, treasuries have rebounded following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.6 basis points at 2.076 percent.
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