U.S. Stocks Give Back Ground After Early Move To The Upside

After moving to the upside early in the session, stocks have given back ground over the course of the trading day on Wednesday. The major averages have pulled back off their highs of the session and are now lingering near the unchanged line.

Currently, the major averages are posting modest gains. The Dow is up 42.94 points or 0.1 percent at 49,046.35, the Nasdaq is up 39.15 points or 0.2 percent at 23,856.25 and the S&P 500 is up 5.26 points or 0.1 percent at 6,983.86.

The early upward move lifted the S&P 500 above the 7,000 level for the first time, while the tech-heavy Nasdaq also climbed back within striking distance of its record highs set in late October.

Buying interest has waned over the course of the session, however, as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged, but the votes by specific officials and the accompanying statement could impact the outlook for rates.

CME Group’s FedWatch Tool suggests investors currently expect the Fed to keep rates on hold until after Fed Chair Jerome Powell steps down in May.

Despite the subsequent pullback by the broader markets, computer hardware stocks continue to see considerable strength, with the NYSE Arca Computer Hardware Index jumping by 2.1 percent.

Seagate Technology (STX) has led the sector higher, soaring by 16.5 percent after reporting better than expected fiscal second quarter results.

Significant strength also remains visible among semiconductor stocks, as reflected by the 1.6 percent gain being posted by the Philadelphia Semiconductor Index.

On the other hand, oil service stocks have come under pressure over the course of the session despite an increase by the price of crude oil.

After reaching its best intraday level in well over a year in early trading, the Philadelphia Oil Service Index has slid by 1.6 percent.

Pharmaceutical stocks have also shown a notable move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 1.3 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, South Korea’s Kospi jumped by 1.7 percent and Hong Kong’s Hang Seng Index surged by 2.6 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index is down by 0.9 percent, the U.K.’s FTSE 100 Index is down by 0.4 percent and the German DAX Index is down by 0.3 percent.

In the bond market, treasuries have moved lower ahead of the Fed decision this afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 4.251 percent.

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