Stocks have shown a lack of direction over the course of the trading day on Tuesday after failing to sustain an initial upward move. Uncertainty about the near-term outlook for the markets following recent volatility is contributing to the choppy trading.
The major averages have moved to the upside in recent trading and are currently posting modest gains. The Dow is up 5.15 points or less than a tenth of a percent at 12,507.81, the Nasdaq is up 9.04 points or 0.3 percent at 2,845.20 and the S&P 500 is up 3.03 points or 0.2 percent at 1,316.75.
The lackluster performance on Wall Street comes after stocks saw significant weakness in the previous session amid lingering concerns about the ongoing European debt crisis.
While bargain hunting contributed to early strength among stocks this morning, buying interest remained relatively subdued amid continued worries about Europe.
Reflecting the continued troubles in Europe, ratings agency Moody's downgraded the long-term debt and deposit ratings for 28 Spanish banks. The downgrades came after Spain formally asked for a bailout to shore up its ailing banking sector.
Moody's noted that the downgrades follow the weakening of the Spanish government's creditworthiness and also reflect the lowering of most of the banks' standalone credit assessments.
Stocks subsequently pulled back off their early highs following the release of a report from the Conference Board showing a bigger than expected decrease by its consumer confidence index.
The Conference Board said its consumer confidence index dropped to 62.0 in June from a downwardly revised 64.4 in May. Economists had expected the index to slip to 63.5 from the 64.9 originally reported for the previous month.
Rob Carnell, chief international economist at ING, noted that there is "some evidence that the looming fiscal cliff is beginning to weigh on household sentiment."
A separate report from Standard & Poor's showed that home prices in major U.S. metropolitan areas rose by more than economists had expected in April.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.7 percent in April, matching the upwardly revised increase in March. Economists had expected home prices to increase by 0.4 percent.
While most of the major sectors are showing only modest moves, considerable weakness has emerged among gold stocks. Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index is down by 2.1 percent after hitting its worst intraday level in almost a month.
The weakness among gold stocks comes amid a notable decrease by the price of the precious metal, with gold for August delivery sliding $16.50 to $1,571.90 an ounce.
Meanwhile, housing stocks are turning in a strong performance on the heels of the report on home prices. The Philadelphia Housing Sector Index is up by 1.7 percent amid strong gains by M/I Homes (MHO) and Meritage Homes (MTH).
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index fell by 0.8 percent, Hong Kong's Hang Seng Index ended the day up by 0.5 percent.
The major European markets also turned mixed over the course of the trading day. The German DAX Index crept up by 0.1 percent, while the U.K.'s FTSE 100 Index edged down by 0.1 percent and the French CAC 40 Index dipped by 0.3 percent.
In the bond market, treasuries have climbed well off their early lows but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 1.619 percent after reaching a high of 1.652 percent.
by RTT Staff Writer
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