Stocks Finish Day Firmly In Negative Territory - U.S. Commentary

(RTTNews) - Stocks moved mostly lower over the course of the trading day on Wednesday, more than offsetting the modest uptick seen in the previous session. Selling pressure picked up as the day progressed, dragging the major averages firmly into negative territory.

The major averages climbed off their lows for the session going into the close but remained in the red. The Dow fell 65.82 points or 0.4 percent to 18,481.48, the Nasdaq slid 42.38 points or 0.8 percent to 5,217.69 and the S&P 500 dropped 11.46 points or 0.5 percent to 2,175.44.

The weakness on Wall Street came following the release of a report from the National Association of Realtors showing a substantial decrease in existing home sales in the month of July.

NAR said existing home sales slumped 3.2 percent to an annual rate of 5.39 million in July from 5.57 million in June. Economists had expected sales to dip by 0.9 percent to a rate of 5.52 million.

With the steep monthly decline, existing home sales are down by 1.6 percent compared to the same month a year ago, reflecting the first year-over-year drop since November of 2015.

Negative sentiment was also generated by a sharp drop by the price of crude oil, with crude for October delivery tumbling $1.33 to $46.77 a barrel.

The steep drop by the price of crude oil came after the Energy Information Administration reported an unexpected increase in crude oil inventories last week.

Among individual stocks, shares of La-Z-Boy (LZB) fell sharply after the furniture manufacturer reported weaker than expected first quarter earnings and a drop in same-store sales.

Navigational technology and wearables maker Garmin (GRMN) also came under pressure after Goldman Sachs downgraded its rating on the company's stock to Sell from Neutral.

On the other hand, shares of OraSure Technologies (OSUR) moved sharply higher after the company received a $16.6 million government contract to advance its rapid Zika tests.

Sector News

Gold stocks showed a particularly steep drop on the day, dragging the NYSE Arca Gold Bugs Index down by 7.8 percent. With the decline, the index tumbled to a nearly two-month closing low.

The sell-off by gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery sliding $16.40 to $1,329.70 an ounce.

Significant weakness also emerged among biotechnology stocks, as reflected by the 3.4 percent loss posted by the NYSE Arca Biotechnology Index. Alnylam (ALNY), Ionis (IONS), and Agios Pharmaceuticals (AGIO) turned in some of the sector's worst performances.

Steel stocks also showed a notable move to the downside, resulting in a 2.8 percent drop by the NYSE Arca Steel Index. The index fell to its lowest closing level in a month.

Health care, energy, and pharmaceutical stocks also came under pressure as the day progressed, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region turned in yet another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index climbed by 0.6 percent, while Hong Kong's Hang Seng Index dropped by 0.8 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the German DAX Index and the French CAC 40 Index both rose by 0.3 percent.

In the bond market, treasuries showed a lack of direction throughout the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.559 percent.

Looking Ahead

Reports on durable goods orders and weekly jobless claims may attract attention on Thursday, but trading activity may be somewhat subdued as a speech by Federal Reserve Chair Janet Yellen looms on Friday.

On the earnings front, HP Inc. (HPQ), Guess? (GES), and Williams-Sonoma (WSM) are releasing their quarterly results after the close of today's trading.

Dollar General (DG), Dollar Tree (DLTR), Medtronic (MDT), Sears (SHLD), and Tiffany (TIF) are also due to report their results before the start of trading on Thursday.