U.S. Stocks Pull Back Sharply Amid Lingering Economic Worries

(RTTNews) - Stocks have moved sharply lower during trading on Wednesday, giving back ground following the substantial recovery rally seen over the two previous sessions. The major averages have all shown significant moves to the downside but remain well off their recent lows.

Currently, the major averages are lingering near their worst levels of the day. The Dow is down 383.50 points or 1.3 percent at 29,932.82, the Nasdaq is down 246.42 points or 2.2 percent at 10,929.99 and the S&P 500 is down 61.98 points or 1.6 percent at 3,728.95.

The sharp pullback on Wall Street comes as traders look to cash in on the strong gains posted early in the week amid lingering concerns about the outlook for the global economy.

Central banks around the world appear poised to continue raising interest in the months ahead, potentially tipping the global economy into a recession as they seek to combat elevated inflation.

A rebound by treasury yields is also weighing on the markets, with the yield on the benchmark ten-year note regaining ground after moving notably lower over the two previous sessions.

Upbeat U.S. economic data has also added to worries the Federal Reserve will maintain its strategy of aggressively raising interest rates going into the end of the year.

Payroll processor ADP released a report showing private sector employment in the U.S. increased by slightly more than expected in the month of September.

ADP said private sector employment surged by 208,000 jobs in September after climbing by an upwardly revised 185,000 jobs in August.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 132,000 jobs originally reported for the previous month.

Meanwhile, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in U.S. service sector activity in the month of September.

The ISM said its services PMI edged down to 56.7 in September from 56.9 in August, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 56.0.

Telecom stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 3.6 percent.

Significant weakness is also visible among interest rate-sensitive utilities and commercial real estate stocks, with the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index both plunging by 3.1 percent.

Gold stocks are also seeing considerable weakness amid a decrease by the price of the precious metal, as reflected by the 2.8 percent slump by the NYSE Arca Gold Bugs Index.

Airline, semiconductor and banking stocks have also shown notable moves to the downside amid broad based selling pressure on Wall Street.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index spiked by 5.9 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index has slumped by 1.7 percent, the French CAC 40 Index is down by 1.2 percent and the U.K.'s FTSE 100 Index is down by 1.0 percent.

In the bond market, treasuries have pulled back sharply after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 14.6 basis points at 3.763 percent.