With traders taking a breather following the recent rally, stocks continue to show a lack of direction in mid-day trading on Wednesday. The major averages have spent the session bouncing back and forth across the unchanged line.
Currently, the major averages continue to turn in a mixed performance, with the tech-heavy Nasdaq posting a modest gain. While the Nasdaq is up 2.05 points or 0.1 percent at 3,056.58, the Dow is down 11.40 points or 0.1 percent at 13,339.56 and the S&P 500 is down 2.20 points or 0.2 percent at 1,444.59.
The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves after the gains seen over the two previous sessions lifted the major averages to their best closing levels in about two months.
Traders are keeping a close eye on developments in Washington, as President Barack Obama and House Speaker John Boehner continue to work toward an agreement to avoid the looming fiscal cliff.
While signs of progress toward a compromise helped to drive stocks higher earlier in the week, traders may be waiting for more concrete signs of an agreement.
Earlier in the day, a statement from White House Communications Director Dan Pfeiffer indicated that Obama would veto Boehner's proposed "Plan B" legislation, which would extend tax cuts for people making up to $1 million.
Boehner unveiled the "Plan B" proposal on Tuesday as an alternative if lawmakers are unable to reach a broader budget agreement.
Pfeiffer claimed the legislation continues large tax cuts for the very wealthiest individuals while eliminating tax cuts that 25 million students and families struggling to make ends meet depend on and ending critical incentives for the nation's businesses.
On the economic front, the Commerce Department released a report before the start of trading showing that U.S. housing starts came in below economist estimates in November.
The report said housing starts fell 3.0 percent to an annual rate of 861,000 in November from the revised October estimate of 888,000. Economists had expected housing starts to fall to 865,000 from the 894,000 originally reported for the previous month.
At the same time, the Commerce Department said building permits rose 3.6 percent to an annual rate of 899,000 in November from the revised October rate of 868,000.
While most of the major sectors are showing only modest moves, airline stocks have shown a strong move to the upside on the day. The NYSE Arca Airline Index has surged up by 1.6 percent, reaching its best intraday level in well over a year.
Brazilian airline GOL (GOL) has helped to lead the sector higher, advancing by 5 percent. Delta (DAL) and US Airways (LCC) are also posting notable gains.
Brokerage stocks are also seeing some strength, with Knight Capital (KCG) posting a standout gain after agreeing to be acquired by GETCO Holding Company in a deal valued at $1.4 billion.
Electronic storage, software, and networking stocks are also moving higher, while weakness is visible among health insurance, gold, and utilities stocks
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged up by 2.4 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.
The major European markets also moved to the upside on the day. While the German DAX Index edged up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.4 percent.
In the bond market, treasuries are regaining ground following recent weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 1.789 percent after ending the previous session at its highest closing level in well over a month.
by RTT Staff Writer
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