Wall Street Dips On Disappointing Housing Data - U.S. Commentary

(RTTNews) - U.S. stocks are showing modest weakness in early trading on Wednesday. Shares dropped at the outset, amid doubt that last week's run up in the market can continue. The release of disappointing statistics about the housing market sparked a further slide in mid-morning trading.

The Dow Jones Industrial Average is currently down about 54 points, or 0.3 percent, to 17,688. The Nasdaq is off 25 points, or 0.5 percent, at 5,083. The S&P 500 has retreated 8 points, or 0.4 percent, to 2,070.

The early slide followed a strong performance on Tuesday. Shares had dipped in Monday's action, but only after a strong showing in last week's holiday-shortened session. With another long weekend on the horizon, traders are cautious to make additional moves ahead of the New Year holiday.

Meanwhile, the impending holiday has many market participants on vacation. This has led to light volume and a general lack of initiative.

The early selling was exacerbated by disappointing data about the housing market. The National Association of Realtors' pending home sales index fell 0.9 percent in November. Economists had expected an increase for the month.

The NAR said that rising home prices and limited home availability contributed to the decline.

In corporate news, Bridgestone has raised the white flag in its bidding war for Pep Boy (PBY). The company said that it will not present a counter offer to acquire the auto parts retailer, allowing Icahn Enterprises L.P. to complete its bid of $18.50 per share. Bridgestone had originally signed a merger deal with Pep Boys, which led to a bidding war with Icahn.

Looking overseas, European stocks have been drifting lower lately, with the major averages now at or near their lows of the session. Germany is leading the declines with a slide of 1.1 percent. France and the U.K. are showing modest losses.

In Asia, the major markets finished mixed. After opening mostly higher, stocks pared early gains amid further oil price weakness and speculation that China's central bank is guiding the yuan lower through fixings. Hong Kong and India dropped, while the Shanghai index finished higher. Japan posted a modest gain in its last trading day of the year.