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Major Averages Turning In Mixed Performance In Morning Trading - U.S. Commentary


Stocks are showing a lack of direction in morning trading on Tuesday following the mixed performance seen in the previous session. While the Nasdaq has moved to the upside, the Dow is pulling back off the record closing high set in the previous session.

Currently, the major averages are on opposite sides of the unchanged line. The Dow is down 18.16 points or 0.1 percent at 24,271.89, but the Nasdaq is up 33.21 points or 0.5 percent at 6,808.57 and the S&P 500 is up 3.00 points or 0.1 percent at 2,642.44.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves amid uncertainty about the near-term outlook for the markets.

On the U.S. economic front, the Commerce Department released a report showing the trade deficit widened more than expected in the month of October.

The report said the trade deficit widened to $48.7 billion in October from a revised $44.9 billion in September. Economists had expected the deficit to widen to $47.5 billion.

A separate report from the Institute for Supply Management showed a bigger than expected slowdown in the pace of service sector growth in November.

The ISM said its non-manufacturing index dropped to 57.4 in November from 60.1 in October, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to dip to 59.0.

"The rate of growth has lessened in the non-manufacturing sector after two very strong months of growth," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

He added, "Comments from the survey respondents indicate that the economy and sector will continue to grow for the remainder of the year."

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Railroad stocks have shown a notable move to the downside, however, with the Dow Jones Railroads Index slumping by 1.5 percent. The index is pulling back off the record closing high set in the previous session.

Gold, housing, and steel stocks have also moved significantly lower, while strength among semiconductor, internet and software stocks is contributing to the advance by the tech-heavy Nasdaq.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.3 percent.

In the bond market, treasuries are showing a lack of direction amid the choppy trading on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.378 percent.

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