After ending the previous session modestly higher, stocks have moved back to the downside during trading on Wednesday. The major averages have all slid into negative territory, although selling pressure has remained somewhat subdued.
Currently, the major averages remain stuck in the red. The Dow is down 74.85 points or 0.3 percent at 27,035.95, the Nasdaq is down 30.48 points or 0.4 percent at 8,155.54 and the S&P 500 is down 8.49 points or 0.3 percent at 2,997.21.
The modest weakness on Wall Street comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.
Economists widely expect the Fed to cut interest rates by another 25 basis points, with CME Group’s FedWatch Tool currently indicating a 70.4 percent chance of a quarter point rate cut.
Traders are likely to pay closer attention to the Fed’s accompanying statement, looking for clues about the likelihood of future rate cuts.
Ahead of the Fed announcement, the Commerce Department released a report showing a substantial rebound in new residential construction in the U.S. in the month of August.
The report said housing starts soared by 12.3 percent to an annual rate of 1.364 million in August after slumping by 1.5 percent to a revised rate of 1.215 million in July.
Economists had expected housing starts to surge up by 5 percent to a rate of 1.250 million from the 1.191 million originally reported for the previous month.
The Commerce Department said building permits also spiked by 7.7 percent to an annual rate of 1.419 million in August after jumping by 6.9 percent to a revised rate of 1.317 million in July.
Building permits, an indicator of future housing demand, had been expected to drop by 2.7 percent to a rate of 1.300 million from the 1.336 million originally reported for the previous month.
Transportation stocks continue to see considerable weakness in mid-day trading, with the Dow Jones Transportation Average slumping by 1.8 percent.
Delivery giant FedEx (FDX) has led the sector lower after reporting weaker than expected fiscal first quarter results and slashing its full-year guidance.
A continued pullback by the price of crude oil is also weighing on energy stocks, as crude for October delivery is sliding $1.15 to $58.19 a barrel after plunging $3.56 to $59.34 a barrel on Tuesday.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index are down by 1.6 percent and 1.4 percent, respectively.
Brokerage, steel, and biotechnology stocks have also moved to the downside on the day, while most of the other major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
The major European markets also turned mixed on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index both inched up by 0.1 percent.
In the bond market, treasuries are extending the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 1.754 percent.
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