After turning mixed over the course of the previous session, stocks have shown a lack of direction during trading on Wednesday. The choppy trading comes as traders look ahead to the European Central Bank's monetary policy meeting.
Currently, the major averages are posting modest gains. The Dow is up 32.91 points or 0.3 percent at 13,068.85, the Nasdaq is up 0.79 points or less than a tenth of a percent at 3,075.85 and the S&P 500 is up 1.16 points or 0.1 percent at 1,406.10.
Uncertainty about tomorrow's European Central Bank meeting is contributing to the lackluster performance on Wall Street, with the bank expected to announce details of a plan to purchase bonds from troubled eurozone countries such as Italy and Spain in order to reduce borrowing costs.
Bloomberg News reported that ECB President Mario Draghi's bond-buying proposal involves unlimited purchases of government debt but will refrain from setting a public cap on yields.
Traders are also staying on the sidelines ahead of Friday's monthly U.S. jobs report, which is expected to show an increase of about 125,000 jobs in August.
Meanwhile, the markets have largely shrugged off a report showing that U.S. labor productivity increased by much more than previously estimated in the second quarter.
The Labor Department said productivity increased by an upwardly revised 2.2 percent in the second quarter compared to the preliminary estimate for 1.6 percent growth. Economists had expected the rate of productivity growth to be revised to 1.9 percent.
With the upward revision, the productivity growth in the second quarter reflects an even more substantial turnaround from the 0.5 percent drop seen in the first quarter.
Among individual stocks, shares of FedEx (FDX) are down by 1.2 percent after the delivery giant cut its first quarter earnings guidance due to weakness in the global economy.
FedEx said it now expects first quarter earnings in the range of $1.37 to $1.43 per share compared to its original forecast for earnings of $1.45 to $1.60 per share.
Meanwhile, auto parts retailer Pep Boys (PBY) is seeing notable strength after reporting stronger second quarter earnings growth. The company also announced the appointment of David Stern as its new CFO. Shares of Pep Boys are up by 5.6 percent on the news.
Shares of DeVry (DV) have also shown a strong move to the upside after the educational services provider said its board has approved a plan to buy back up to $100 million worth of its common stock.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Nonetheless, airline stocks have moved sharply higher on the day, driving the NYSE Arca Airline Index up by 1.4 percent. The gain by the index comes after it ended the previous session at its lowest closing level in a month.
United Continental (UAL) and US Airways (LCC) are turning in two of the airline sector's best performances, advancing by 4.6 percent and 4.4 percent, respectively.
Meanwhile, railroad stocks have come under considerable selling pressure, dragging the Dow Jones Railroads Index down by 1.2 percent. Earlier in the session, the index hit its lowest intraday level in well over a month.
Within the railroad sector, Providence and Worcester (PWX) and Guangshen Railway (GSH) are posting notable losses.
In overseas trading, stock markets across the Asia-Pacific region came under pressure during trading on Wednesday. Japan's Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index tumbled by 1.5 percent.
Meanwhile, the major European markets turned mixed over the course of the trading session. While the U.K.'s FTSE 100 Index edged down by 0.3 percent, the French CAC 40 Index inched up by 0.2 percent and the German DAX Index rose by 0.5 percent.
In the bond market, treasuries continue to show a lack of direction ahead of the ECB meeting. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.587 percent.
by RTT Staff Writer
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