(RTTNews) - Stocks showed a negative bias throughout much of the trading day on Wednesday, ending the session modestly lower. A negative reaction to the minutes of the latest Federal Reserve meeting weighed on the markets, although stocks closed well off their worst levels of the day.
While the Dow and the Nasdaq ended the session firmly in negative territory, the S&P 500 closed roughly flat. The S&P 500 edged down 0.02 points or less than a tenth of a percent to 1,341.45, while the Dow fell 48.59 points or 0.4 percent to 12,604.53 and the Nasdaq slid 14.35 points or 0.5 percent to 2,887.98.
After initially showing a lack of direction, stocks moved mostly lower over the course of morning trading amid lingering concerns about the economic outlook following last week's disappointing jobs report. Continued uncertainty about the situation in Europe also weighed on the markets.
Further selling pressure was seen following the release of the minutes of the Federal Reserve's latest monetary policy meeting held in June.
While the minutes noted that the Fed members agreed that the central bank is prepared to take further if necessary, the Fed gave no hint that a third round of quantitative easing is imminent.
Peter Boockvar, managing director at Miller Tabak, said, "In terms of getting new info on QE3 we didn't get much from the Fed minutes, as this meeting focused more on the extension of [Operation Twist,] with just a few wanting to go the route of more printing right now."
Nonetheless, selling pressure waned not long after the release of the minutes, and stocks managed to climb well off their lows for the session.
Meanwhile, traders largely shrugged off the release of a report from the Commerce Department showing that the U.S. trade deficit narrowed in the month of May.
The report showed that the trade deficit narrowed to $48.7 billion in May from a revised $50.6 billion in April. The narrower deficit came in line with economist estimates.
"Bottom line, even including the modest prior month upward revision in the trade data, GDP estimates for Q2 should remain little changed post today's data," Boockvar said.
A separate report from the Commerce Department showed a 0.3 percent increase in wholesale inventories in May, while wholesale sales tumbled by 0.8 percent.
Among individual stocks, shares of Adtran (ADTN) fell sharply after the networking and communications equipment company reported better than expected second quarter earnings but on weaker than expected revenues. Adtran ended the day down by 15.4 percent.
Sector News
While the major averages all ended the day in negative territory, the major sectors on Wall Street turned in a more mixed performance.
Gold stocks turned in some of the market's worst performances, moving lower along with the price of the precious metal. With gold for August delivery sliding $4.10 to $1,575.20 an ounce, the NYSE Arca Gold Bugs Index fell by 2.1 percent.
Significant weakness was also visible among networking stocks, as reflected by the 1.6 percent loss posted by the NYSE Arca Networking Index. Adtran helped to lead the way lower, dragging the index down to a nearly three-year closing low.
Defense, biotechnology, and trucking stocks also posted notable losses but ended the session well off their worst levels of the day.
Meanwhile, airline stocks showed a strong move to the upside, driving the NYSE Arca Airline Index up by 2.1 percent. SkyWest (SKYW) helped to lead the sector higher after reporting its June traffic numbers.
Oil and oil service stocks also posted strong gains, with the strength in the sector coming as crude for August delivery rose $1.90 to $85.81 a barrel. Considerable strength also emerged among banking stocks, as reflected by the 1.2 percent gain posted by the KBW Bank Index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's Nikkei 225 Index edged down by 0.1 percent, Hong Kong's Hang Seng Index crept up by 0.1 percent.
The major European markets also ended the day mixed. The French CAC 40 Index fell by 0.6 percent, while the German DAX Index rose by 0.2 percent and the U.K.'s FTSE 100 Index closed just above the unchanged line.
In the bond market, treasuries showed a lack of direction for much of the session, ending the day roughly flat. The yield on the benchmark ten-year note ended the day exactly unchanged at 1.498 percent.
Looking Ahead
Trading on Thursday could be impacted by the release of the Labor Department's weekly jobless claims report following last week's disappointing monthly jobs report. The Labor Department is also due to release a separate report on import and export prices.
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