Stocks showed a lack of direction throughout the trading day on Wednesday, as traders seemed reluctant to make any significant moves. The choppy trading came after stocks ended the previous session mostly lower but well off their worst levels.
The major averages ended the session mixed, with the Nasdaq closing just above the unchanged line. The Nasdaq inched up 1.17 points or less than a tenth of a percent to 3,075.32, while the Dow fell 45.57 points or 0.4 percent to 13,124.62 and the S&P 500 slipped 2.63 points or 0.2 percent to 1,402.89.
The lack of direction shown by stocks came as traders seemed reluctant to make any significant moves following the substantial advance seen over the past several months, which lifted the major averages to multi-year highs.
While recent indicators have pointed to a continued recovery by the U.S. economy, some analysts believe the markets need to stage a temporary correction before they can see any further upside.
At the same time, traders have largely seemed hesitant to cash in on the recent gains amid concerns that stocks could leg up further on more upbeat data.
Nonetheless, traders largely shrugged off the release of a report from the National Association of Realtors showing a modest drop in existing home sales in the month of February.
NAR said existing home sales slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January. Economists had expected existing home sales to edge up to 4.61 million from the 4.57 million that had been reported for the previous month.
The modest drop in existing home sales in February came after sales surged up by an upwardly revised 5.7 percent in January. The revised figure for January represents the highest level since May of 2010.
Among individual stocks, shares of Oracle (ORCL) turned lower on the day even though the business software giant reported stronger than expected adjusted third quarter earnings amid a notable increase in new software license revenues.
Business uniform supplier Cintas (CTAS) also ended the day in the red despite reporting better than expected third quarter earnings and raising its full year earnings guidance above analyst estimates.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's Nikkei 225 Index ended the day down by 0.6 percent, China's Shanghai Composite Index crept up by 0.1 percent.
The major European markets also turned mixed over the course of the trading day. The French CAC 40 Index edged down by 0.1 percent, while the U.K.'s FTSE 100 Index closed just above the unchanged line and the German DAX Index rose by 0.2 percent.
In the bond market, treasuries moved notably higher on the day, climbing further off their recent lows. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 7.8 basis points to 2.294 percent.
Despite the lack of direction shown by the broader markets, oil service stocks saw significant weakness on the day. Reflecting the weakness in the oil service sector, which came despite an increase by the price of crude oil, the Philadelphia Oil Service Index fell by 1.9 percent.
Baker Hughes (BHI) helped to lead the oil service sector lower, falling by 5.8 percent after forecasting a sequential drop in its first quarter operating profit due to a shift away from natural gas production.
Considerable weakness was also visible among steel stocks, as reflected by the 1.2 percent loss posted by the NYSE Arca Steel Index. With the loss, the index pulled back further off the one-month closing high that it set on Monday.
On the other hand, trucking stocks showed a notable move to the upside on the day, driving the Dow Jones Trucking Index up by 0.9 percent. Con-Way (CNW) and Landstar (LSTR) turned in two of the trucking sector's best performances.
Trading on Thursday could be impacted by reaction to the Labor Department's report on weekly jobless claims. The Conference Board is also due to release its leading economic indicators report.
by RTT Staff Writer
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