Stocks Regain Ground But Remain Mostly Negative - U.S. Commentary

(RTTNews) - After coming under pressure in early trading on Wednesday, stocks have regained some ground over the course of the session. The major averages have climbed well off their worst levels of the day but remain stuck in the red.

Currently, the major averages are posting moderate losses on the day. The Dow is down 77.50 points or 0.4 percent at 17,698.62, the Nasdaq is down 25.98 points or 0.5 percent at 4,874.91 and the S&P 500 is down 7.65 points or 0.4 percent at 2,060.24.

The early weakness on Wall Street was partly due to the release of some disappointing economic data, including a report from payroll processor ADP showing a continued slowdown in the pace of private sector job growth in the month of March.

ADP said private sector employment climbed by 189,000 jobs in March following a slightly upwardly revised increase of 214,000 jobs in February. Economists had expected an increase of about 230,000 jobs.

With the continued slowdown, the pace of private sector job growth came in below 200,000 for the first time since January of last year.

Mark Zandi, chief economist of Moody's Analytics, said, "Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market."

A separate report from the Institute for Supply Management showed that the pace of growth in manufacturing activity slowed by more than anticipated in March.

The ISM said its purchasing managers index dropped by 1.4 points to 51.5 in March after edging down 0.6 points to 52.9 in February.

While a reading above 50 indicates continued growth in manufacturing activity, economists had expected the index to show a more modest drop to 52.5.

The reports have added to recent concerns about the economy, although selling pressure has waned from earlier in the session due in part to optimism that the data may lead the Federal Reserve to delay an increase in interest rates.

Sector News

While many of the major sectors have recovered from their worst levels of the day, biotechnology stocks continue to see significant weakness in mid-day trading. The NYSE Arca Biotechnology Index has climbed off its lows but remains down by 1.7 percent.

Nektar Therapeutics (NKTR), Myriad Genetics (MYGN), and Incyte (INCY) are turning in some of the biotech sector's worst performances.

Considerable weakness also remains visible among airline stocks, as reflected by the 1.4 percent loss being posted by the NYSE Arca Airline Index.

The weakness in the airline sector comes after Deutsche Bank downgraded Delta (DAL), United Continental (UAL), and American Airlines (AAL) to Hold from Buy.

Health care, steel, and trucking stocks also continue to see notable weakness, while gold stocks have moved sharply higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dropped by 0.9 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index climbed by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries have moved notably higher on the heels of the disappointing economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7 basis points at 1.864 percent.