Stocks Close Modestly Lower After Late-Day Pullback - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout much of the session, stocks came under pressure in the latter part of the trading day on Wednesday and closed modestly lower. The pullback ended a four-day winning streak by the markets.

The major averages ended the day in negative territory but off their lows for the session. The Dow dipped 42.32 points or 0.3 percent to 16,633.18, the Nasdaq slid 11.99 points or 0.3 percent to 4,225.07 and the S&P 500 edged down 2.13 points or 0.1 percent to 1,909.78.

The modestly lower close on Wall Street came on the heels of the recent upward trend by the markets, with the S&P 500 giving back some ground after ending the previous session at a record closing high.

The recent gains have also lifted the Dow toward the record highs set earlier this month, while the tech-heavy Nasdaq ended Tuesday's trading at its best closing level in almost two months.

A rally may treasuries may have also played a part in the late-day pullback, as the ten-year yield was pushed down to its lowest levels since last Summer.

Expectations of further stimulus from the European Central Bank lead to strength among European bonds as well as follow-through in the U.S. bond markets.

Nonetheless, traders seemed reluctant to make any significant moves for much of the session amid a lack of major U.S. economic data.

Among individual stocks, shares of DWS Inc. (DWS) fell sharply on the day after the discount shoe retailer reporter first quarter results that came in below estimates and cut its full-year guidance.

3D printer maker 3D Systems (DDD) also came under pressure after announcing a public offering of 5.95 million shares of its common stock.

On the other hand, shares of PetroLogistics (PDH) showed a strong upward move after the propylene producer agreed to be acquired by a subsidiary of Koch Industries in an all-cash transaction valued at approximately $2.1 billion, including debt.

Sector News

Despite the late-day pullback by the major averages, most of the major sectors ended the day showing only modest moves.

Gold stocks saw considerable weakness, however, with the NYSE Arca Gold Bugs Index dropping by 1.8 percent. With the loss, the index fell to its lowest closing level in well over four months.

The weakness among gold stocks came amid a continued decrease by the price of the precious metal, with gold for June delivery sliding $6.20 to $1,259.30 an ounce after plunging by more than $26 an ounce on Tuesday.

Steel, pharmaceutical, and tobacco stocks also saw some weakness on the day, while strength in the airline sector drove the NYSE Arca Airline Index up by 1.4 percent to a twelve-year closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.

Meanwhile, the major European markets ended the day roughly flat. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index and the German DAX Index both finished the day nearly unchanged.

In the bond market, treasuries moved sharply higher amid continued expectations of further stimulus in Europe. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 8 basis points to an eleven-month closing low of 2.438 percent.

Looking Ahead

Economic data may attract some attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims and pending home sales as well as a revised reading on first quarter GDP.

On the earnings front, retailers Abercrombie & Fitch (ANF) and Costco (COST) are among the companies due to report their quarterly results before the start of trading on Thursday.