The benchmark indices all closed with sizable losses on Wednesday as light profit-taking on technology and biotech stocks accelerated later in the day to broad-based selling. All eleven sectors of the S&P 500 were in negative territory with financials and utilities taking the brunt of today’s selling pressure. All Dow component stocks with the exception of Travelers (TRV) were in the red, including shares of Goldman Sachs (GS) which were as much as 1.2% higher at Wednesday’s open.
While there wasn’t a definitive catalyst for Wednesday’s correction, the turnaround can be attributed to both the lack of buyers, as well as pension rebalancing before the end of the year. This was evidenced by the performance of the Treasury market in which the yield on the 10-year note fell 5 basis points on Wednesday to its lowest level in more than a week.
Additionally, Wall Street was disappointed by a 10-month low in the pending home sales index, a sign that higher mortgage rates are dampening demand for housing. The index, which measures the number of home sales under contract but not yet closed, fell by 2.5% to 107.3 in November, significantly below expectations to increase by 0.5%.