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Stocks Extend Lackluster Performance In Mid-Day Trading - U.S. Commentary


Stocks have wavered over the course of the trading day on Wednesday, as traders express uncertainty about the near-term outlook for the markets. An unimpressive retail sales report has contributed to the choppy trading on Wall Street.

The major averages have moved to the downside in recent trading and are currently mixed. While the Nasdaq is up 1.02 points or less than a tenth of a percent at 3,187.51, the Dow is down 60.63 points or 0.4 percent at 13,958.07 and the S&P 500 is down 1.32 points or 0.1 percent at 1,518.11.

The lackluster performance by stocks comes on the heels of the release of the Commerce Department's closely watched monthly retail sales report.

The report showed that retail sales edged up by just 0.1 percent in January, although economists noted that it could have been worse in light of the recent increase in payroll taxes.

"U.S. consumers took a step back to breathe a little at the start of the year," said Jennifer Lee, senior economist at BMO Capital.

However, she noted, "This was in-line with expectations and shouldn't be viewed as a sign that consumers are back in retrenchment mode."

A separate report from the Labor Department showed that import prices rebounded by less than expected in January, while export prices rose in line with estimates.

Traders are also digesting President Barack Obama's State of the Union address from last night, although it remains to be seen how much progress the president can make on his policy goals in light of the recent gridlock in Washington.

Obama called for an increase in the minimum wage as well as a boost to investment in infrastructure. The president also continued to push his proposals on immigration, gun control, and climate change.

Sector News

Most of the major sectors continue to show only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Nonetheless, notable weakness has emerged among gold stocks, as reflected by the 1.2 percent loss being posted by the NYSE Arca Gold Bugs Index. Coeur d'Alene Mines (CDE) is posting a steep loss after announcing an offer to acquire Orko Silver Corp. for $383 million.

Networking and telecom stocks are also seeing some weakness on the day, although selling pressure remains relatively subdued.

On the other hand, some strength is also visible among tobacco stocks, with Lorillard (LO) posting a standout gain after the cigarette maker reported better than expected fourth quarter results and raised its dividend. Healthcare provider and airline stocks have also moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Australia's All Ordinaries Index advanced by 0.9 percent, while South Korea's KOSPI Index surged up by 1.6 percent. However, Japan's Nikkei 225 Index bucked the uptrend and fell by 1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both ended the day up by 0.3 percent.

In the bond market, treasuries have climbed off their worst levels of the day but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.2 basis points at 2.004 percent.

by RTTNews Staff Writer

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