Stocks Close Mostly Lower But Dow Inches Higher - U.S. Commentary

(RTTNews) - Following the modest weakness seen in the previous session, stocks saw some further downside during trading on Wednesday. The tech-heavy Nasdaq showed a particularly steep drop, although the Dow managed to close slightly higher.

While the Dow inched up 22.51 points or 0.1 percent to 25,974.99, the Nasdaq tumbled 96.07 points or 1.2 percent to 7,995.17 and the S&P 500 fell 8.12 points or 0.3 percent to 2,888.60.

Ongoing trade tensions between the U.S. and its key partners contributed to the continued weakness on Wall Street.

A report from Reuters said Canadian Prime Minister Justin Trudeau has indicated Canada will not bend on key demands regarding NAFTA in talks with the U.S. this week.

"There are a number of things we absolutely must see in a renegotiated NAFTA," Trudeau told reporters on Tuesday.

U.S. and Canadian officials are scheduled to hold trade talks in Washington today after failing to reach an agreement last week.

Reports President Donald Trump intends to impose tariffs on another $200 billion worth of Chinese imports as soon as a public comment period ends on Thursday may also generate selling pressure.

In trade-related economic news, the Commerce Department released a report showing the U.S. trade deficit widened in the month of July.

The Commerce Department said the trade deficit widened to $50.1 billion in July from a revised $45.7 billion in June.

Economists had expected the deficit to widen to $50.1 billion from the $46.3 billion originally reported for the previous month.

Sector News

Oil service stocks showed a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 2.3 percent.

The sell-off by oil service stocks came amid a sharp drop by the price of crude oil, as crude for October delivery tumbled $1.15 to $68.72 a barrel.

Significant weakness was also visible among networking stocks, as reflected by the 1.6 percent drop by the NYSE Arca Networking Index. The index pulled back further off the seventeen-year closing high set last Friday.

Retail and computer hardware stocks also saw considerable weakness on the day, while tobacco and utilities stocks showed strong moves to the upside.

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 0.5 percent, while Hong Kong's Hang Seng Index plunged by 2.6 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slumped by 1 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.4 percent and 1.5 percent, respectively.

In the bond market, treasuries showed a lack of direction before ending the session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 2.902 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to any developments regarding trade as well as reports on weekly jobless claims, private sector employment, and service sector activity.