WASHINGTON (dpa-AFX) - Stocks moved mostly lower over the course of the trading day on Wednesday, adding to the modest losses posted in the previous session. With the drop on the day, the major averages pulled back further off Monday's record closing highs.
The major averages saw further downside going into the close, hitting new lows for the session. The Dow fell 115.78 points or 0.4 percent to 27,219.85, the Nasdaq dropped 37.59 points or 0.5 percent to 8,185.21 and the S&P 500 slid 19.62 points or 0.7 percent to 2,984.42.
The weakness on Wall Street came following the release of a Commerce Department 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 was somewhat subdued, however, as traders stuck to the sidelines as they wait for the earnings season to pick up steam being making more significant bets.
Traders may have been 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
After moving sharply higher in the previous session, transportation stocks showed a substantial move back to the downside. The Dow Jones Transportation Average plunged by 3.6 percent after jumping by 1.8 percent to a two-month closing high on Tuesday.
CSX Corp. (CSX) led the sector lower after the rail operator reported weaker than expected second quarter earnings and slashed its full-year revenue forecast.
Oil service stocks also saw considerable weakness on the day, dragging the Philadelphia Oil Service Index down by 3.3 percent.
The weakness among oil service stocks came as the price of crude oil for August delivery slid $0.84 to $56.78 a barrel following the release of a report showing increases in gasoline and distillate fuel stockpiles.
Natural gas, chemical, and steel stocks also showed notable moves to the downside, while gold stocks moved significantly higher along with the price of the precious metal.
With gold for August delivery surging up $12.10 to a six-year closing high of $1,423.30 an ounce, the NYSE Arca Gold Bugs Index spiked by 3.5 percent.
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 rebounded following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.1 basis points to 2.061 percent.
Looking Ahead
Earnings news may be in the spotlight on Thursday, although traders are also likely to keep an eye on reports on weekly jobless claims, Philadelphia-area manufacturing activity, and leading economic indicators.
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