Profit Taking Contributes To Continued Weakness On Wall Street - U.S. Commentary

(RTTNews) - Stocks have moved modestly lower in early trading on Wednesday, adding to the losses posted in the previous session. With the drop, the major averages are pulling back further off the record closing highs set on Monday.

Currently, the major averages remain in the red but off their lows for the young session. The Dow is down 57.93 points or 0.3 percent at 18,494.09, the Nasdaq is down 14.83 points or 0.3 percent at 5,212.28 and the S&P 500 is down 6.45 points or 0.3 percent at 2,171.70.

Profit taking has contributed to the weakness on Wall Street, as traders continue to cash in on the recent strength in the markets.

Negative sentiment was also generated in reaction to quarterly results from retail giants Target (TGT) and Lowe's (LOW).

Target reported better than expected second quarter earnings but lowered its full-year guidance due to a "difficult retail environment."

Home improvement retailer Lowe's is also under pressure after reporting second quarter results that came in below analyst estimates.

Overall trading activity is somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Later in the day, trading may be impacted by reaction to the minutes of the Federal Reserve's last monetary policy meeting in July.

The minutes could shed some light on the outlook for interest rates ahead of the Fed's next meeting in September.

Most economists currently expect the Fed to leave rates unchanged next month due to the release of a mixed batch of economic data.

Gold stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.9 percent.

The weakness in the gold sector comes amid a decrease by the price of the precious metal, with gold for December delivery sliding $8.80 to $1,348.10 an ounce.

Steel, natural gas, and oil service stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index dipped by 0.5 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.6 percent, the French CAC 40 Index is down by 0.9 percent and the German DAX Index is down by 1.4 percent.

In the bond market, treasuries have moved modestly higher as traders await the release of the Fed minutes. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.3 basis points at 1.563 percent.