Nasdaq Showing Significant Pullback, Dow Little Changed

Stocks have moved mostly lower in morning trading on Wednesday, giving back ground following the upward move seen in the previous session. The tech-heavy Nasdaq has shown a notable move to the downside, while the Dow is lingering near the unchanged line.

After ending Tuesday’s trading sharply higher, the Nasdaq is down 151.75 points or 1.3 percent at 11,206.67. The S&P 500 is also down 20.34 points or 0.5 percent at 3,971.39.

At the same time, the narrower Dow is up 25.39 points or 0.1 percent at 33,618.31 amid strong gains by UnitedHealth (UNH) and McDonald’s (MCD).

The pullback by the broader markets comes amid a steep drop by shares of Target (TGT), with the retail giant plunging by 13.6 percent.

Target is under pressure after reporting weaker than expected third quarter earnings and slashing its operating margin forecast for the current quarter.

Traders are also digesting a mixed batch of U.S. economic data, which has added to recent uncertainty about the outlook for interest rates.

Before the start of trading, the Commerce Department released a report showing a significant increase in U.S. retail sales in the month of October.

The report showed retail sales surged by 1.3 percent in October after coming in unchanged in September. Economists had expected retail sales to jump by 1.0 percent.

Excluding a sharp increase in sales by motor vehicle and parts dealers, retail sales still shot up by 1.3 percent in October after inching up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.4 percent.

Meanwhile, the Federal Reserve released a separate report unexpectedly showing a modest decrease in U.S. industrial production in the month of October.

The Fed said industrial production edged down by 0.1 percent in October following a revised 0.1 percent uptick in September.

The dip surprised economists, who had expected industrial production to inch up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.

The National Association of Home Builders also released a report showing a continued decrease in U.S. homebuilder confidence in the month of November.

The report showed the NAHB/Wells Fargo Housing Market Index declined for the 11th consecutive month, slumping to 33 in November after tumbling to 38 in October. Economists had expected the index to dip to 36.

With the bigger than expected decrease, the index fell to its lowest reading since June 2012, with the exception of the onset of the pandemic in the spring of 2020.

Semiconductor stocks are pulling back sharply, with the Philadelphia Semiconductor Index plunging by 3.5 percent after ending the previous session at its best closing level in well over two months.

Computer hardware and networking stocks are also seeing considerable weakness, dragging the NYSE Arca Computer Hardware Index and the NYSE Networking Index down by 2.5 percent and 2.4 percent, respectively.

Significant weakness is also visible among brokerage stocks, as reflected by the 1.8 percent drop by the NYSE Arca Broker/Dealer Index.

Transportation, steel and retail stocks have also shown notable moves to the downside, while utilities and pharmaceutical stocks are bucking the downtrend.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index both fell by 0.5 percent, while Japan’s Nikkei 225 Index bucked the downtrend and crept up by 0.1 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1.1 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.

In the bond market, treasuries are extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.1 basis points at 3.738 percent.

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