Stocks showed a lack of direction over the course of the trading day on Wednesday, extending the lackluster performance seen in the two previous sessions. The choppy trading came despite the release of a batch of relatively upbeat economic data.
The major averages eventually ended the session slightly higher. The Dow inched up 4.49 points or less than a tenth of a percent to 13,107.48, the Nasdaq rose 4.05 points or 0.1 percent to 3,081.19 and the S&P 500 edged up 1.19 points or 0.1 percent to 1,410.49.
The lackluster performance on Wall Street came as traders largely shrugged off some upbeat U.S. economic data, including a report from the Commerce Department showing slightly stronger than previously estimated U.S. economic growth in the second quarter.
The report showed that GDP increased by 1.7 percent in the second quarter compared to the 1.5 percent growth previously reported. The upward revision came in line with economist estimates.
A separate report from the National Association of Realtors showed that pending home sales rose by more than expected in the month of July, reaching their highest level in over two years.
NAR said its pending home sales index rose by 2.4 percent to 101.7 in July after falling by 1.4 percent to 99.3 in June. Economists had been expecting the index to increase by about 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Additionally, the Federal Reserve released its Beige Book later in the day, indicating that U.S. economic activity continued to expand gradually in July and early August
The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions from each of the twelve Fed districts.
Six districts indicated that the local economy continued to expand at a modest pace, while another three cited moderate growth.
With the data largely seen as backward looking, traders continued to look ahead to Fed Chairman Ben Bernanke's speech at the Jackson Hole symposium on Friday.
While most of the major sectors showed only modest moves, considerable weakness was visible among steel stocks. Reflecting the weakness in the steel sector, the NYSE Arca Steel Index fell by 1.6 percent to a one-month closing low.
Schnitzer Steel (SCHN) helped to lead the steel sector lower, with the steel maker sliding 5.2 percent after Credit Agricole downgraded its rating on the stock to Sell from Underperform.
Airline stocks also moved to the downside on the day, dragging the NYSE Arca Airline Index down by 1.5 percent. Gold and oil service stocks also moved notably lower.
On the other hand, health insurance stocks saw significant strength, with the Morgan Stanley Healthcare Payor Index advancing by 1.1 percent. WellPoint (WLP) posted a standout gain after the company announced that its Chairman and CEO Angela Braly abruptly stepped down.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. While Japan's Nikkei 225 Index rose by 0.4 percent, Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets also turned in a mixed performance on the day. The German DAX Index inched up by 0.1 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.5 percent and 0.6 percent, respectively.
In the bond market, treasuries gave back some ground after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 1.654 percent.
Trading on Thursday could be impacted by the release of reports on weekly jobless claims and personal income and spending. Nonetheless, trading activity may be somewhat subdued as traders wait on Bernanke's Jackson Hole speech.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org