WASHINGTON (dpa-AFX) - After showing an early move to the upside, stocks have given back ground over the course of morning trading on Wednesday. The major averages have pulled back off their highs of the young session, with the Dow and the S&P 500 dipping into negative territory.
Currently, the major averages are on opposite sides of the unchanged line. While the Nasdaq is up 2.61 points or less than 0.1 percent at 8,276.22, the Dow is down 2.34 points or 0.1 percent at 27,195.68 and the S&P 500 is down 3.09 points or 0.1 percent at 3,010.09.
The initial strength on Wall Street partly reflected a positive reaction to earnings news from Apple (AAPL), with the tech giant surging up by 4.1 percent.
The jump by Apple comes after the company reported fiscal third quarter results that beat expectations on both the top and bottom lines despite a steep drop in iPhone sales.
Buying interest waned shortly after the start of trading, however, as traders look ahead to the Federal Reserve's highly anticipated monetary policy announcement this afternoon.
The U.S. economy is experiencing its longest expansion in history, but the Fed is still expected to cut interest rates by at least 25 basis points in a proactive move aimed at offsetting the negative effects of the U.S.-China trade war.
President Donald Trump has repeatedly urged the Fed to lower rates, claiming in a post on Twitter on Monday that the central bank 'has made all of the wrong moves.'
Assuming the Fed cuts rates as expected, traders are likely to pay close attention to the accompanying statement for clues about the potential for future rate cuts.
On the U.S. economic front, payroll processor ADP released a report showing private sector employment increased by slightly more than anticipated in the month of July.
ADP said private sector employment climbed by 156,000 jobs in July after rising by an upwardly revised 112,000 jobs in June.
Economists had expected employment to increase by 150,000 jobs compared to the addition of 102,000 jobs originally reported for the previous month.
Meanwhile, a separate report from MNI Indicators unexpectedly showed a continued contraction in Chicago-area business activity in the month of July.
The report said the Chicago business barometer tumbled to 44.4 in July from 49.7 in June, with a reading below 50 indicating a contraction in regional business activity.
The continued decrease came as a surprise to economists, who had expected the business barometer to edge back above 50 to 50.6.
'Global risks, trade tensions, slowdown in demand and sombre growth expectations, all jeopardize business conditions,' said Shaily Mittal, Senior Economist at MNI.
'Firms are not panicking yet, but the latest report isn't adding to the cheer,' she added. 'The above risks lend weight to a monetary easing approach by the Fed, albeit a gradual one.'
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Gold stocks have shown a significant move to the downside, however, with the NYSE Arca Gold Bugs Index slumping by 2.5 percent.
The weakness among gold stocks comes amid a modest decrease by the price of the precious metal, as gold for December delivery is slipping $1.30 to $1,440.50 an ounce.
Considerable weakness is also visible among semiconductor stocks, as reflected by the 1.6 percent drop by the Philadelphia Semiconductor Index.
Chipmaker Advanced Micro Devices (AMD) is posting a steep loss after reporting second quarter results that met estimates but providing disappointing guidance.
On the other hand, oil service stocks are extending the substantial upward move seen on Tuesday, driving the Philadelphia Oil Service Index up by 1.2 percent.
The continued rally by oil service stocks comes as the price of crude oil for September delivery is climbing $0.55 to $58.60 a barrel after a report showed another steep weekly drop in crude oil inventories.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 0.9 percent, while Hong Kong's Hang Seng Index tumbled by 1.3 percent.
Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has fallen by 0.7 percent, the French CAC 40 Index and the German DAX Index are up by 0.5 percent and 0.6 percent, respectively.
In the bond market, treasuries are seeing modest strength ahead of this afternoon's Fed announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 2.044 percent.
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