Election Uncertainty Contributing To Pullback On Wall Street
Stocks have moved mostly lower in morning trading on Wednesday, giving back ground after moving sharply higher over the three previous sessions. The major averages have all moved to the downside, with the Dow pulling back off its best closing level in well over two months.
Currently, the major averages are just off their lows of the session. The Dow is down 289.41 points or 0.9 percent at 32,871.42, the Nasdaq is down 132.83 points or 1.3 percent at 10,483.37 and the S&P 500 is down 37.45 points or 1.0 percent at 3,790.66.
The pullback on Wall Street comes as traders cash 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 Republican 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, Wisconsin, Nevada and Arizona currently remain undecided.
A slump by shares of Disney (DIS) is also weighing on Wall Street, with the entertainment giant plunging by 11.0 percent to a two-year intraday low.
The steep drop by Disney comes 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) have surged by 7.4 after the Facebook parent announced plans to cut more than 11,000 jobs.
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.
Networking stocks have moved sharply lower in morning trading, dragging the NYSE Arca Networking Index down by 3.6 percent.
A steep drop by the price of crude oil is also weighing on energy stocks, with crude for December delivery tumbling $1.69 to $87.22 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 3.5 percent and the NYSE Arca Oil Index is down by 2.3 percent.
Semiconductor stocks have also shown a notable pullback, resulting in a 2.0 percent slump by the Philadelphia Semiconductor Index.
Computer hardware, tobacco and banking stocks have also moved to the downside, while some strength is visible among housing stocks.
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 have climbed off their worst levels but continue to see modest weakness on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.2 percent.
In the bond market, treasuries have shown a lack of direction over the course of the morning. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.124 percent.
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