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Stocks Mostly Positive In Mid-Day Trading - U.S. Commentary


After initially showing a lack of direction, stocks are mostly higher in mid-day trading on Tuesday. The tech-heavy Nasdaq is outperforming its counterparts after showing a steep decline in the previous session.

Currently, the Dow is up 2.67 points or less than a tenth of a percent at 24,292.72, the Nasdaq is up 49.45 points or 0.7 percent at 6,824.81 and the S&P 500 is up 7.37 points or 0.3 percent at 2,646.81.

The strength on Wall Street may reflect optimism about the economic impact of the tax reform bill approved by Senate Republicans over the weekend.

With the vote to approve the bill, lawmakers from the Senate and House will need to go to conference to work out differences in the bills passed by the two chambers.

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."

Electronic storage, semiconductor, and internet stocks are seeing considerable strength on the day, contributing to the rebound by the Nasdaq.

On the other hand, gold stocks have come under considerable pressure amid a decrease by the price of the precious metal.

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 also moved to the downside on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index dipped by 0.2 percent and 0.3 percent, respectively.

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 2.376 percent.

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