WEED Canopy Growth Corporation

By Mark DeCambre, MarketWatch , Chris Matthews

Fed minutes are slated to be released at 2 p.m. Eastern Time

U.S. stocks early Wednesday gave back nearly half the bounce that sent major indexes a day earlier to their biggest gain since March, as investors digest global political developments and react to a spate of corporate earnings.

Minutes from the Federal Reserve's September meeting, at which they raised interest rates, were expected later Wednesday.

How are benchmarks performing?

The Dow Jones Industrial Average fell 215 points, or 0.9%, to 25,580 while the S&P 500 traded 17 points lower to 2,793, a decline of 0.6%. The Nasdaq Composite Index slipped 43 points, or 0.6%, to 7,602.

Read:Why a big, 1-day stock-market bounce doesn't mean 'blue skies ahead' (http://www.marketwatch.com/story/why-a-big-1-day-stock-market-rebound-doesnt-mean-blue-skies-ahead-2018-10-17)

On Tuesday, the Dow jumped 547.87 points, or 2.2%, to 25,798.42. The S&P 500 gained 59.13 points, or 2.2%, to 2,809.92 with tech and health care among the strongest performers in a session where all 11 sectors finished higher. The Nasdaq Composite Index climbed 214.75 points, or 2.9%, to 7,645.49. It was the biggest single-day advance for all three indexes since March 26.

What's driving the market?

Thus far stock gains have been supported by stronger-than-expected corporate results and healthy economic data. However, concerns about rapidly rising interest rates may return to the fore with the rate-setting Federal Reserve scheduled to release an account of minutes from its Sept. 25-26 gathering, which delivered a third rate increase in 2018 as expected.

Minutes aren't ordinarily a source of volatility, however, the outsize focus on Treasury rates--notably a rise in the yield on the 10-year Treasury note to a seven-year high last week--that can raise corporate and individual borrowing costs may make a more detailed account of last month's policy convention slightly more intriguing.

Fed minutes are scheduled to be released at 2 p.m. Eastern Time.

Meanwhile, the market continues to closely watch negotiations between the European Union and Britain as it attempts to exit from the trade bloc with a trade agreement in hand. The potential for a clash between Italy and the European Union over Rome's budget plans (http://www.marketwatch.com/story/italys-government-oks-draft-budget-that-would-widen-deficit-2018-10-15) is also in the spotlight.

Which data were in focus?

The number of new homes under construction fell 0.6% to a seasonally-adjusted annual rate of 1.201 million (http://www.marketwatch.com/story/housing-starts-tick-down-in-another-weak-month-for-residential-construction-2018-10-17) in September. The rate was 1% below last year's levels. The numbers nearly matched the consensus forecast of 1.208 million produced by a MarketWatch survey of economists.

Permits for construction of new homes also fell 5.3% in September from the month before to a seasonally adjusted annual rate of 1.241 million. The number represents a 3.7% increase year-over-year, but still was weaker than average analysts expectations polled by FactSet for a pace of 1.28 million new permits.

What were analysts saying?

"We had a big day yesterday, and today's open shows that volatility is not going away," said Jeff Carbone, co-founder of asset management firm Cornerstone Wealth Group. With interest rates markedly higher today than even one month ago, investors will remain cautious, and the early morning downturn is evidence of this change in sentiment, he said. "But when you look at the fundamentals of the economy and the market, we expect the market to ultimately move upward."

Which stocks were in focus?

Shares of Netflix Inc. (NFLX) burst out of the gate, a day after it reported better-than-expected quarterly results (http://www.marketwatch.com/story/netflix-earnings-send-stock-surging-suggest-huge-decline-was-an-aberration-2018-10-16) late-Tuesday. The stock was up more than 6.8%.

Investors soured on shares of International Business Machines Corp. (IBM), after the company announced a revenue miss following the close on Tuesday. Shares were down 6.3%.

Shares of United Continental Holdings(UAL) are up 4.9% after the market open, following news that executives raised their forecasts for 2018 profits, even as the firm missed analysts' third quarter EPS estimates.

Tesla(TSLA) stock is down 2.1% in morning trading, following an SEC filling by the company saying it plans to issue $20 million in stock that will be bought by the company's founder, Elon Musk. The stock initially popped on the news (http://www.marketwatch.com/story/teslas-stock-jumps-after-elon-musk-discloses-plan-to-buy-20-million-worth-of-shares-2018-10-17), but reversed course after the market opened. The filing also announced that a federal court approved a settlement between Tesla, Musk and the Securities and Exchange Commission that has the company and its founder each paying $20 million in fines related to Musk's proposal to take Tesla private.

Shares of companies in the cannabis industry garnered investor interest on the first day of legal, recreational marijuana use across Canada. Shares of all four major, publicly listed cannabis firms (http://www.marketwatch.com/story/a-guide-to-pot-stocks-what-you-need-to-know-to-invest-in-cannabis-companies-2018-10-15) were down in early trading.

Aurora Cannabis (ACB.T)was least liked by investors, falling 12.5%. Shares in Aphria, Inc. (APH.T) fell 7%.

Cronos Group (CRON.T)stock was down 7.8% in early trading, while Canopy Growth Corporation(WEED.T) was down 4.6%

How did other markets trade?

Asian stocks ended higher, with Japan's Nikkei jumping 1.3%, extending Tuesday's rally in the U.S., while European indexes were trading slightly lower as Italian and British political uncertainty buffeted stock benchmarks.

Crude-oil prices fell, while gold prices were virtually unchanged as the U.S. dollar index edged slightly higher early Wednesday.

(END) Dow Jones Newswires

October 17, 2018 11:17 ET (15:17 GMT)

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