After failing to sustain an initial upward move, stocks have shown a lack of direction over the course of the trading day on Tuesday. The volatility comes as traders keep a close eye on Congressional testimony by Federal Reserve Chairman Ben Bernanke.
The major averages have moved to the upside in recent trading and are currently posting modest gains. The Dow is up 36.33 points or 0.3 percent at 12,763.54, the Nasdaq is up 1.43 points or 0.1 percent at 2,898.37 and the S&P 500 is up 2.95 points or 0.2 percent at 1,356.59.
The choppy trading on Wall Street comes as Fed Chief Bernanke continues to answer questions before the Senate Banking Committee.
In his prepared remarks, Bernanke reiterated that the central bank is prepared to take further action if the economy continues to struggle, but traders seemed disappointed that his remarks did not indicate that further stimulus was imminent.
Peter Boockvar, managing director at Miller Tabak said, "Anyone thinking or hoping for something definitive from Bernanke about what the Fed will announce in two weeks at their next FOMC meeting didn't get any specifics."
"Bottom line, on the question of whether the Fed is close to acting again at the next meeting, it's unanswered today as Bernanke may want to wait until the two-day meeting before he firmly decides," Boockvar added.
With earnings season starting to pick up steam, traders are also digesting a batch of quarterly results from big name companies such as Goldman Sachs (GS), Coca-Cola (KO), and Johnson & Johnson (JNJ).
Before the start of trading, Goldman Sachs reported second quarter adjusted earnings of $1.78 per share on revenues of $6.6 billion compared to analyst estimates for earnings of $1.12 per share on revenues of $6.4 billion.
Coca-Cola also reported better than expected second quarter results, while Johnson & Johnson reported second quarter sales that fell short of estimates and lowered its full-year earnings guidance.
On the economic front, the Labor Department released a report showing that U.S. consumer prices came in unchanged in June, as a steep drop in energy prices was offset by higher prices for food, medical care, and apparel.
The Federal Reserve released a separate report showing a bigger than expected increase in industrial production in June, while the National Association of Home Builders reported a substantial improvement in homebuilder confidence in July.
Despite the volatility being shown by the broader markets, substantial weakness remains visible among trucking stocks. The Dow Jones Trucking Index is down by 3.4 percent after hitting its worst intraday level in over a month.
J.B. Hunt Transport Services (JBHT) has helped to lead the trucking sector, falling by 7.1 percent after reporting second quarter earnings that met analyst estimates but on weaker than expected revenues.
Gold stocks are also seeing significant weakness on the day, resulting in a 1.3 percent loss 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 sliding $13.80 to $1,577.80 an ounce.
While semiconductor and brokerage stocks are also seeing notable weakness, considerable strength is visible among telecom and chemical stocks.
In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Tuesday. Japan's Nikkei 225 Index ended the day up by 0.4 percent, while Hong Kong's Hang Seng Index surged up by 1.8 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index crept up by 0.2 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.6 percent.
In the bond market, treasuries are giving back some ground after trending higher in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 1.493 percent, bouncing off a record closing low.
by RTT Staff Writer
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