Stocks moved sharply lower during trading on Wednesday, giving back ground after closing high for three straight sessions. The major averages all showed significant moves to the downside, with the Dow pulling back off its best closing level in well over two months.
The major averages finished the session just off their worst levels of the day. The Dow tumbled 646.89 points or 2.0 percent to 32,513.94, the Nasdaq plunged 263.02 points or 2.5 percent to 10,353.17 and the S&P 500 dove by 79.54 points or 2.1 percent to 3,748.57.
The sharply pullback on Wall Street came as traders cashed in on recent strength in the markets amid lingering uncertainty about the results of the U.S. midterm elections.
Control of both houses of Congress remains up for grabs following yesterday’s elections, although Republicans are projected to earn a narrow majority in the House.
The performance by Republicans was not as strong as many had expected, with many candidates backed by former President Donald Trump underperforming.
It remains unclear which party will have a majority in the Senate, as key races in Georgia, Nevada and Arizona currently remain undecided.
Traders may also be moving money out of stocks ahead of tomorrow’s highly anticipated report on consumer price inflation, which could have a significant impact on the outlook for interest rates.
A slump by shares of Disney (DIS) also weighed on Wall Street, with the entertainment giant plunging by 13.2 percent to its lowest closing level in over two years.
The steep drop by Disney came after the company reported fiscal fourth quarter results that missed analyst estimates on both the top and bottom lines.
On the other hand, shares of Meta Platforms (META) surged by 5.1 percent after the Facebook parent announced plans to cut more than 11,000 jobs.
A steep drop by the price of crude oil contributed to substantial weakness among energy stocks, with crude for December delivery plunging $3.08 to $85.83 a barrel following a report showing a much bigger than expected weekly increase in U.S. crude oil inventories.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 5.6 percent, the NYSE Arca Oil Index dove by 4.4 and the NYSE Arca Natural Gas Index tumbled by 4.3 percent.
Significant weakness was also visible among networking stocks, as reflected by the 4.7 percent nosedive by the NYSE Arca Networking Index.
Computer hardware stocks also saw considerable weakness on the day, resulting in a 3.3 percent slump by the NYSE Arca Computer Hardware Index.
Tobacco, semiconductor and retail stocks also showed notable moves to the downside amid broad based selling pressure.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.6 percent, while South Korea’s Kospi jumped by 1.1 percent.
Meanwhile, European stocks finished the day modestly lower. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index both dipped by 0.2 percent.
In the bond market, treasuries finished a choppy session in the red following a disappointing ten-year note auction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.5 basis points to 4.151 percent.
The Labor Department’s report on consumer price inflation is likely to be it the spotlight on Thursday, as traders closely analyze the data for clues about the outlook for interest rates.
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