After showing a strong move to the upside in the previous session, stocks are giving back some ground during trading on Monday. The major averages have all pulled back, with the Dow showing a notable drop.
Currently, the major averages are off their lows of the session but still in negative territory. The Dow is down 248.85 points or 0.7 percent at 33,837.19, the Nasdaq is down 26.14 points or 0.2 percent at 11,558.41 and the S&P 500 is down 11.83 points or 0.3 percent at 4,064.77.
The pullback on Wall Street comes as some traders look to cash in on yesterday’s gains ahead of the Federal Reserve’s monetary policy announcement this afternoon.
While the Fed is widely expected to raise interest rates by 25 basis points, traders will look to the accompanying statement for clues about outlook for further rate hikes.
Ahead of the Fed announcement, payroll processor ADP released a report showing private sector job growth slowed by more than expected in the month of January.
ADP said private sector employment climbed by 106,000 jobs in January after surging by an upwardly revised 253,000 jobs in December.
Economists had expected private sector employment to increase by 178,000 jobs compared to the addition of 235,000 jobs originally reported for the previous month.
A separate report released by the Institute for Supply Management showed activity in the U.S. manufacturing sector contracted for the third consecutive month in January.
The ISM said its manufacturing PMI dipped to 47.4 in January from 48.4 in December, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 48.0.
Airline stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 2.1 percent.
Significant weakness is also visible among energy stocks, which are moving lower along with the price of crude oil.
With crude oil for March delivery falling $0.76 to $78.11 a barrel, the NYSE Arca Oil Index is down by 1.9 percent and the Philadelphia Oil Service Index is down by 1.3 percent.
Natural gas and steel stocks have also moved notably lower, while semiconductor stocks have shown a strong move to the upside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.2 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.
In the bond market, treasuries have moved to the upside ahead of the Fed’s monetary policy announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 3.492 percent.
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