Stocks Close In The Red But Well Off Worst Levels - U.S. Commentary

(RTTNews) - With renewed concerns about the outlook for the Federal Reserve's stimulus program continuing to weigh on the markets on Wednesday, stocks added to the notable losses posted in the previous session.

Selling pressure waned over the course of the session, however, and the major averages ended the day well off their early lows.

After falling nearly 100 points in early trading, the Dow ended the day down 48.07 points or 0.3 percent at 15,470.67. The Nasdaq dipped 11.76 points or 0.3 percent to 3,654.01 and the S&P 500 slid 6.46 points or 0.4 percent to 1,690.91.

The early weakness on Wall Street came as a lack of major U.S. economic data led traders to continue to focus on yesterday's comments from two Fed officials.

Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans both delivered remarks on Tuesday suggesting that the central bank will begin scaling back its bond purchases later this year, potentially as soon as the September meeting.

While the remarks should not have come as a surprise to anyone, the negative reaction in the markets reflected the continued jitters over the outlook for the program.

Later in the day, Cleveland Fed President Sandra Pianalto said she would be prepared to scale back the pace of asset purchases if the labor market continues to improve, although she did not specify a time frame.

Negative sentiment was also generated in reaction to quarterly results from Disney (DIS), with the media giant falling by 1.7 percent on the day.

After the close of trading on Tuesday, Disney reported net income that was little changed year-over-year, although its adjusted earnings exceeded analyst estimates.

However, the company also reported weaker than expected quarterly sales and said it expects to record a loss of as much as $190 million on "The Lone Ranger" in the current quarter.

Sector News

While most of the major sectors ended the session well off their worst levels, substantial weakness remained visible among trucking stocks. The Dow Jones Trucking Index tumbled by 2.7 percent, pulling back further off the record closing high it set last Thursday.

YRC Worldwide (YRCW) helped lead the trucking sector lower, with the transportation services provider plunging by 17.7 percent after reporting a much wider than expected second quarter loss.

Housing stocks also ended the day significantly lower, resulting in a 2 percent drop by the Philadelphia Housing Sector Index. With the loss, the index fell to a seven-month closing low.

Electronic storage, retail, and natural gas stocks also saw notable weakness at the close, while most of the other major sectors were showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index plummeted by 4 percent on the day, while Hong Kong's Hang Seng Index tumbled by 1.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index edged up by 0.2 percent, the U.K.'s FTSE 100 Index dropped by 1.4 percent and the German DAX Index fell by 0.5 percent.

In the bond market, treasuries moved notably higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.2 basis points to 2.60 percent.

Looking Ahead

Trading on Thursday could be impacted by the release of the Labor Department's weekly jobless claims report, with claims expected to rebound from a five-year low.