After moving mostly higher over the course of the three previous sessions, stocks showed a lack of direction throughout the trading day on Wednesday. Uncertainty about the near-term outlook for the markets contributed to the choppy trading.
While the Dow ended the day down by 43.16 points or 0.3 percent at 14,676.30, the broader Nasdaq and S&P 500 closed roughly flat. The Nasdaq edged up 0.32 points or less than a tenth of a percent to 3,269.65, while the S&P 500 inched up 0.01 points or less than a hundredth of a percent to 1,578.79.
The lackluster performance on Wall Street came after the gains seen over the past few sessions lifted the major averages back within striking distance of the record highs seen earlier this month.
While the major averages pulled back sharply off the highs last week, many analysts continue to call for a more substantial correction before the markets resume their upward trajectory.
Traders were also weighing upbeat earnings news from some big-name companies against a disappointing report on durable goods orders.
Before the start of trading, the Commerce Department released a report showing a much steeper than expected drop in durable goods orders in the month of March.
The report showed that durable goods orders tumbled by 5.7 percent in March following a revised 4.3 percent increase in February. Economists had expected orders to drop by 2.8 percent.
Excluding a sharp drop in orders for transportation equipment, durable goods orders still fell by 1.4 percent in March compared to a 1.7 percent drop in February.
The data partly offset positive sentiment that was generated by better than expected earnings news from companies such as Ford (F) and Boeing (BA).
Traders were also reacting to quarterly results from tech giant Apple (AAPL), which reported second quarter results that exceeded expectations but forecast third quarter revenues below the consensus estimate. Shares of Apple ended the day modestly lower.
Despite the lackluster performance by the broader markets, gold stocks moved substantially higher over the course of the trading day. Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index surged up by 7 percent.
The strength among gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $14.90 to $1,423.70 an ounce.
Oil service stocks also saw considerable strength, moving higher along with the price of crude oil. With crude for June delivering jumping $2.25 to $91.43 a barrel, the Philadelphia Oil Service Index advanced by 2.2 percent.
Steel, defense, and software stocks also posted notable gains, with the strength in the software sector lifting the Dow Jones Software Index to a twelve-year closing high.
Meanwhile, significant weakness among biotechnology, networking, and telecom stocks offset the strength in the aforementioned sectors. Motorola Solutions (MSI) and AT&T (T) helped lead the telecom sector lower after reporting disappointing quarterly results.
In overseas trading, stock markets across the Asia-Pacific region saw significant strength during trading on Wednesday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index soared by 2.3 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.
The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index and the French CAC 40 Index jumped 1.3 percent and 1.6 percent, respectively.
In the bond market, treasuries ended the day roughly flat for the third consecutive session. Subsequently, the yield on the benchmark ten-year note closed unchanged at 1.698 percent.
Trading on Thursday may be impacted by the release of the Labor Department's report on weekly jobless claims. Economists expect claims to edge down to 350,000 from 352,000.
On the earnings front, 3M (MMM), Exxon Mobil (XOM), Dow Chemical (DOW), Hershey (HSY), and Southwest Airlines (LUV) are among the slew of companies scheduled to release their quarterly results before the start of trading on Thursday.
by RTT Staff Writer
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