After ending the previous session mixed, stocks have moved modestly lower in morning trading on Tuesday. With the drop on the day, the Nasdaq and the S&P 500 are pulling back off yesterday’s record closing highs.

Currently, the major averages are just off their lows of the session. The Dow is down 131.59 points or 0.4 percent at 34,262.16, the Nasdaq is down 76.44 points or 0.5 percent at 14,097.71 and the S&P 500 is down 8.55 points or 0.2 percent at 4,246.60.

The modest weakness on Wall Street comes as traders continue to look ahead to the Federal Reserve’s monetary policy announcement.

The two-day Fed meeting that began today is not likely to result in any changes to monetary policy, but the central bank could signal that it is beginning to think about scaling back its asset purchases.

The Fed announcement on Wednesday is likely to acknowledge the recent increase in inflation, which was highlighted by today’s Labor Department report showing record annual producer price growth.

The Labor Department said its producer price index for final demand advanced by 0.8 in May after climbing by 0.6 percent in April. Economists had expected another 0.6 percent increase.

Excluding prices for food, energy, and trade services, core producer prices rose by 0.7 in May, matching the increase seen in the previous month. Core prices were expected to rise by 0.5 percent.

Compared to the same month a year ago, producer prices in May were up by 6.6 percent, reflecting the largest increase since 12-month data were first calculated in November 2010.

The annual rate of core producer price growth also accelerated to a record high of 5.3 percent in May from 4.6 percent in April.

Meanwhile, the Commerce Department released a separate report showing retail sales tumbled by more than expected in the month of May, although the steep drop followed a notable upward revision to the previous month’s data.

The report said retail sales plunged by 1.3 percent in May following an upwardly revised 0.9 percent increase in April.

Economists had expected retail sales to slump by 0.8 percent compared to the unchanged reading originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still slid 0.7 percent in May after coming in unchanged in April. Ex-auto sales were expected to inch up by 0.2 percent.

The Fed also released a report showing industrial production increased by more than expected in the month of May after a downwardly revised uptick in the previous month.

The Fed said industrial production climbed by 0.8 percent in May after inching up by a revised 0.1 percent in April.

Economists had expected industrial production to rise by 0.6 percent compared to the 0.5 percent increase that had been reported for the previous month.

Steel stocks have shown a substantial move to the downside in morning trading, dragging the NYSE Arca Steel Index down by 2.4 percent.

Significant weakness has also emerged among gold stocks, as reflected by the 1.3 percent drop by the NYSE Arca Gold Bugs Index.

The weakness among gold stocks comes amid a decrease by the price of the precious metal, with gold for August delivery falling $4.30 to $1,861.60 an ounce.

Airline and biotechnology stocks have also moved to the downside on the day, while energy stocks are moving higher along with the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1 percent, while China’s Shanghai Composite Index slid by 0.9 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.5 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries are showing a lack of direction after coming under pressure on Monday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.504 percent.

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