WASHINGTON (dpa-AFX) - After ending yesterday's choppy trading day modestly lower, stocks showed a more significant move to the downside during trading on Wednesday. The tech-heavy Nasdaq saw a particularly steep drop on the day.
The major averages climbed off their worst levels going into the end of the day but still closed in the red. The Nasdaq tumbled 511.51 points or 1.9 percent to 26,692.87 and the S&P 500 slumped 86.51 points or 1.1 percent to 7,7718.94.
The narrower Dow posted a much more modest loss, with the blue chip index edging down 48.62 points or 0.1 percent to 51,621.48.
The weakness on Wall Street came after the Labor Department released its closely watched report on consumer price inflation in the month of September.
While the report showed consumer prices grew in line with estimates, it also showed a bigger than expected increase in core consumer prices, which exclude food and energy prices.
The report said consumer prices climbed by 0.6 percent in September after rising by 0.4 percent in August. The increase in prices matched economist estimates.
The Labor Department also said the annual rate of consumer price growth jumped to 3.7 percent in September from 3.4 percent in August, which was also in line with expectations.
Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.3 percent for the second straight month. Economists had expected core prices to edge up by 0.2 percent.
The annual rate of core consumer price growth accelerated to 2.6 percent in September from 2.4 percent in August, coming in slightly above economist estimates for 2.5 percent growth.
The bigger than expected increase in core prices led to renewed concerns about the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.
A sharp increase by the price of crude oil also weighed on stocks, with U.S. crude oil futures jumping by more than 1 percent.
The jump in crude oil prices came after a report from the International Energy Agency warned the recent escalation in attacks on regional energy infrastructure and tanker traffic in the Middle East is threatening to derail a recovery in oil supply.
Sector News
Computer hardware stocks showed a substantial move to the downside over the course of the session, resulting in a 6.3 percent nosedive by the NYSE Arca Computer Hardware Index.
The sharp increase by the price of crude oil also contributed to significant weakness among airline stocks, with the NYSE Arca Airline Index plummeting by 5.1 percent.
Gold, semiconductor and networking stocks also saw considerable weakness on the day, while pharmaceutical and healthcare stocks bucked the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slipped by 0.1 percent, while China's Shanghai Composite Index slid by 0.9 percent.
Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.7 percent, the French CAC 40 Index climbed by 0.6 percent and the German DAX Index rose by 0.2 percent.
In the bond market, treasuries have shown a significant turnaround over the course of the session at an early slump. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has fallen 3.2 basis points to 5.185 percent after surging to a high of 5.329 percent.
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