After moving markedly higher over the course of the first hour of trading on Tuesday, stocks have shown a notable move back to the downside. The major averages have pulled back well off their highs for the session and are once again lingering near the unchanged line.
Currently, the major averages are posting modest gains, well off their best levels of the day. The Dow is up 7.88 points or 0.1 percent at 13,279.52, the Nasdaq is up 5.30 points or 0.2 percent at 3,081.51 and the S&P 500 is up 2.98 points or 0.2 percent at 1,421.11.
The early strength on Wall Street was partly due to optimism about the financial situation in Europe amid reports that the European Central Bank is considering buying bonds from troubled eurozone countries such as Italy and Spain in order to reduce borrowing costs.
Optimism about potential progress on addressing the Greek debt crisis also generated some buying interest, with Eurogroup chief Jean-Claude Juncker due to meet with Greek Prime Minister Antonis Samaras in Athens on Wednesday.
Nonetheless, the markets were unable to sustain the early upward move, as traders seemed somewhat reluctant to continue buying stocks following recent strength.
A lack of major U.S. economic data may also have contributed to the lack of follow-through, with traders looking ahead to Wednesday's report on existing home sales as well as the release of the minutes of the Federal Reserve's latest monetary policy meeting.
Some traders subsequently looked to cash in on the early gains, which lifted the S&P 500 to its highest intraday level in over four years.
Among individual stocks, shares of Best Buy (BBY) have come under pressure after the consumer electronic retailer reported second quarter earnings that fell by much more than anticipated. The company also suspended its earnings guidance.
Bookstore operator Barnes & Noble (BKS) has also moved lower despite reporting a much narrower than expected first quarter loss. The company said it benefited from strong sales of the Fifty Shades series.
On the other hand, shares of Urban Outfitters (URBN) have moved sharply higher after the apparel retailer reported better than expected second quarter results.
Despite the pullback by the broader markets, substantial strength remains visible among gold stocks. The NYSE Arca Gold Bugs Index remains up by 2.7 percent after reaching a two-month intraday high.
The continued strength among gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery up $18.20 at $1,641.20 an ounce.
Airline stocks are also holding on to notable gains, with the NYSE Arca Airline Index up by 1.7 percent. The index is adding to the 2.9 percent it posted on Monday but has pulled back off the one-month intraday high set earlier in the session.
Banking and brokerage stocks also continue to see considerable strength on the day, while most of the major sectors are showing only modest moves.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. China's Shanghai Composite Index and Australia's All Ordinaries Index rose by 0.5 percent and 0.4 percent, respectively, while Japan's Nikkei 225 Index bucked the uptrend and dipped by 0.2 percent.
The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.6 percent, the German DAX Index and the French CAC 40 Index closed up by 0.8 percent and 0.9 percent, respectively.
In the bond market, treasuries have come under pressure over the course of the session after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.8 basis points at 1.852 percent.
by RTT Staff Writer
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