Stocks Move Modestly Lower Amid Risk Aversion - U.S. Commentary

(RTTNews) - While selling pressure has remained relatively subdued, stocks are seeing modest weakness in morning trading on Tuesday. The major averages have dipped into negative territory, moving lower for the fourth straight session.

Currently, the major averages remain stuck in the red. The Dow is down 66.42 points or 0.4 percent at 17,666.06, the Nasdaq is down 14.37 points or 0.3 percent at 4,834.07 and the S&P 500 is down 7.56 points or 0.4 percent at 2,071.50.

The weakness on Wall Street comes as traders are expressing some trepidation ahead of the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to keep a close eye on the accompanying statement.

Fed Chair Janet Yellen's subsequent press conference is also likely to be in focus amid uncertainty about the possibility of a rate hike next month.

Ongoing concerns about next week's referendum on whether Britain will remain in the European Union are also weighing on the markets.

A YouGov poll conducted for The Times showed that 46 percent of voters support the so-called Brexit, while 39 percent want to remain in the EU.

On the U.S. economic front, the Commerce Department released a report this morning showing stronger than expected retail sales growth in the month of May.

The Commerce Department said retail sales climbed by 0.5 percent in May after surging up by 1.3 percent in April. Economists had expected sales to rise by 0.3 percent.

Excluding an increase in auto sales, retail sales still rose by 0.4 percent in May following a 0.8 percent increase in the previous month. The ex-auto sales growth matched economist estimates.

The Labor Department also released a report showing that import prices surged up by much more than expected in May amid another substantial increase in fuel prices.

The report said import prices jumped by 1.4 percent in May after climbing by an upwardly revised 0.7 percent in April. Economists had expected import prices to rise by 0.8 percent.

The Labor Department said export prices also shot up by 1.1 percent in May following a 0.5 percent advance in April. Export prices had been expected to edge up by 0.2 percent. Steel stocks have shown a notable move to the downside on the day, dragging the NYSE Arca Steel Index down by 1.4 percent. Mechel (MTL) and ArcelorMittal (MT) are turning in two of the sector's worst performances.

Housing, airline, and gold stocks are also seeing considerable weakness, while most of the other major sectors have shown more modest declines.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Japan's Nikkei 225 Index tumbled by 1 percent, while Hong Kong's Hang Seng Index dropped by 0.6 percent. However, China's Shanghai Composite Index bucked the downtrend and rose by 0.3 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has plunged by 2 percent, the U.K.'s FTSE 100 Index is down by 1.5 percent and the German DAX Index is down by 1.1 percent.

In the bond market, treasuries have pulled back off their best levels but continue to see modest strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 1.604 percent.