Stocks Move Mostly Lower Amid Lingering Fed Worries - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved mostly lower over the course of the trading day on Tuesday. Selling pressure has remained relatively subdued, however, limiting the downside for the markets.

The major averages have recently climbed off their lows for the session but remain in the red. The Dow is down 29.64 points or 0.2 percent at 15,854.93, the Nasdaq is down 10.47 points or 0.3 percent at 4,019.04 and the S&P 500 is down 7.22 points or 0.4 percent at 1,779.32.

The weakness that has emerged on Wall Street partly reflects concerns about the outlook for the Federal Reserve's stimulus program as the central bank's two-day monetary policy meeting gets underway.

Recent upbeat economic data has led some economists to predict that the Fed will announce plans to begin scaling back its asset purchases, although others still expect the central bank to put off tapering until next year.

Some selling pressure was generated by news that the bipartisan budget agreement cleared a key procedural hurdle in the Senate, setting the stage for final passage of the bill later this week.

The passage of the budget agreement should lift some of the fiscal uncertainty that the Fed has frequently cited as a hindrance to the economy.

Before the start of trading, the Labor Department released a report showing that consumer prices came in unchanged in the month of November.

The Labor Department said its consumer price index was unchanged in November after edging down by 0.1 percent in October. The flat reading for the index came in line with economist estimates.

Meanwhile, the core consumer price index, which excludes food and energy prices, rose by 0.2 percent in November following a 0.1 percent uptick in the previous month. Economists had expected core prices to inch up by another 0.1 percent.

The National Association of Home Builders also released a report showing that homebuilder confidence improved by much more than anticipated in the month of December.

Sector News

Airline stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Airline Index down by 1.7 percent. Delta (DAL) and United Continental (UAL) are turning in two of the sector's worst performances.

Considerable weakness also remains visible among biotechnology stocks, as reflected by the 1.3 percent loss being posted by the NYSE Arca Biotechnology Index. With the loss, the index has fallen to its lowest intraday level in almost a month.

Healthcare, housing, and brokerage stocks are also seeing some weakness in mid-day trading, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index tumbled by 1.2 percent, the German DAX Index slid by 0.9 percent and the U.K.'s FTSE 100 Index dropped by 0.6 percent.

In the bond market, treasuries have moved moderately higher after turning lower over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 2.856 percent.