Stocks are seeing considerable weakness in mid-day trading on Wednesday, giving back ground after trending higher in recent sessions. With the drop on the day, the S&P 500 is pulling back off its best closing level in five months.
In recent trading, the Dow and the S&P 500 fell to new lows for the session. The Dow is down 188.23 points or 0.8 percent at 24,731.43, the Nasdaq is down 43.43 points or 0.6 percent at 7,715.77 and the S&P 500 is down 17.19 points or 0.6 percent at 2,776.65.
The weakness on Wall Street comes amid renewed concerns about the economic impact of a global trade war after President Donald Trump's administration proposed new tariffs on China.
Trump has ordered U.S. Trade Representative Robert Lighthizer to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.
The move comes after the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports last Friday, leading China to retaliate by imposing tariffs on $34 billion worth of U.S. exports.
"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," Lighthizer said. "We have been very clear and detailed regarding the specific changes China should undertake."
"Unfortunately, China has not changed its behavior - behavior that puts the future of the U.S. at risk," he added. "Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action."
China has vowed to take countermeasures in response to the new tariffs, which will not effect until after a two-month review process.
In U.S. economic news, the Labor Department released a report showing producer prices increased by slightly more than expected in the month of June.
The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.
Excluding food and energy prices, core producer prices also climbed by 0.3 percent in June, matching the increase seen in May. Core prices had been expected to rise by 0.2 percent.
Compared to the same month a year ago, producer prices were up by 3.4 percent in June, representing the largest 12-month increase since a 3.7 percent jump in November of 2011.
Steel stocks continue to turn in some of the market's worst performances in mid-day trading, with the NYSE Arca Steel Index plummeting by 2.9 percent. The index is pulling back after closing higher in four consecutive sessions.
The significant weakness among steel stocks reflects concerns about the impact of the ongoing trade dispute between the U.S. and China.
Substantial weakness has also emerged among semiconductor stocks, as reflected by the 2.2 percent slump by the Philadelphia Semiconductor Index.
Energy stocks have also come under pressure, moving lower along with the price of crude oil. Crude for August delivery is plunging $1.58 to $72.53 a barrel.
Chemical, telecom, and transportation stocks are also seeing notable weakness in mid-day trading, moving lower along with most of the other major sectors.
In overseas trading, stock across the Asia-Pacific region saw substantial weakness during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.2 percent, while China's Shanghai Composite Index plunged by 1.8 percent.
The major European markets also showed significant moves to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 1.3 percent, the German DAX Index and the French CAC 40 Index both plummeted by 1.5 percent.
In the bond market, treasuries have pulled back off their highs of the session but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 2.858 percent.
by P2PNews Staff Writer