After moving mostly higher over the course of the three previous sessions, stocks showed a lack of direction during trading on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.
The major averages eventually ended the session mixed, with the tech-heavy Nasdaq posting a modest loss. While the Nasdaq edged down by 4.61 points or 0.2 percent to 3,011.25, the Dow crept up 7.04 points or 0.1 percent to 13,175.64 and the S&P 500 inched up 0.87 points or 0.1 percent to 1,402.22.
The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following the recent strength.
Profit taking contributed to early weakness among stocks, with traders cashing in on the recent gains, which lifted the major averages to three-month highs.
Disappointing comments from Dallas Federal Reserve President Richard Fisher also weighed on the markets, as he told Bloomberg that the Fed has done its job regarding providing the necessary economic stimulus and that it is now up to the private sector.
Fisher also said that Congress needs to address the fiscal policy uncertainty in order for the liquidity in the system to be put to work.
The remarks from Fisher were in stark contrast to comments by Boston Fed President Eric Rosengren, who called for an "open-ended" quantitative easing program to boost economic growth during an interview with CNBC on Tuesday.
However, stocks did not see much follow-through on the initial downward move amid continued optimism about further stimulus from Europe.
A rally by shares of Hewlett-Packard (HPQ: Quote) helped the markets to recover from the early weakness, with the computer and printer maker advancing by 2.4 percent after upwardly revising its third quarter earnings guidance.
Shares of Disney (DIS: Quote) also moved notably higher after the entertainment giant reported better than expected third quarter earnings after the close of trading on Tuesday.
Meanwhile, McDonald's (MCD: Quote) came under pressure after the fast food giant reported global comparable sales that were flat in July compared to expectations for an increase in excess of 2 percent.
Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.
Nonetheless, considerable strength emerged among health insurance stocks, as reflected by the 1.6 percent gain posted by the Morgan Stanley Healthcare Payor Index. Health Net (HNT) and Humana (HUM) turned in two of the sector's best performances.
Airline, healthcare provider, and steel stocks also posted notable gains, with SkyWest (SKYW: Quote) leading the airline sector higher after reporting stronger than expected second quarter earnings.
Meanwhile, electronic storage stocks came under pressure on the day, dragging the NYSE Arca Disk Drive Index down by 1.7 percent. STEC Inc. (STEC: Quote) posted a steep loss, falling by 7.7 percent after reporting a wider than expected second quarter loss and providing disappointing guidance.
Internet, commercial real estate, and networking stocks also saw some weakness, offsetting the strength seen in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan's Nikkei 225 Index rose by 0.9 percent, while China's Shanghai Composite Index edged up by 0.2 percent. However, Hong Kong's Hang Seng bucked the uptrend and closed just below the unchanged line.
Meanwhile, the major European markets turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index crept up by 0.1 percent, the German DAX Index closed just below the unchanged line and the French CAC 40 Index fell by 0.4 percent.
In the bond market, treasuries closed modestly lower on the heels of a disappointing ten-year note auction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.2 basis points to 1.64 percent.
Trading on Thursday could be impacted by the release of reports on the U.S. trade balance, weekly jobless claims, and wholesale inventories.
On the earnings front, News Corp. (NWS), CenturyLink (CTL), Monster Beverage (MNST), and RealNetworks (RNWK) are among the companies releasing their quarterly results after the close of today's trading.
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by RTT Staff Writer
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