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Major Averages Close Mixed Following Lackluster Session - U.S. Commentary

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Stocks showed a lack of direction over the course of the trading session on Wednesday before ending the day roughly flat. The choppy trading on the day came on the heels of the strength seen in the previous session.

The major averages eventually ended the session mixed. While the Nasdaq dipped 18.25 points or 0.2 percent to 7,954.23, the Dow inched up 27.86 points or 0.1 percent to 25,998.92 and the S&P 500 crept up 1.03 points or less than a tenth of a percent to 2,888.92.

Traders seemed reluctant to make significant moves amid lingering uncertainty about the trade dispute between the U.S. and China.

Reports the is proposing a new round of trade talks with China in the near future generated some buying interest, although traders remained skeptical.

On the U.S. economic front, the Labor Department released a report unexpectedly showing a modest drop in producer prices in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after coming in unchanged in July. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, core producer prices still edged down by 0.1 percent in August following a 0.1 percent uptick in July. Core prices had been expected to increase by 0.2 percent.

Meanwhile, the Federal Reserve's Beige Book said the U.S. economy expanded at a moderate pace through the end of August.

The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions in the twelve Fed districts released shortly before the central bank makes its decision on monetary policy.

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Financial stocks saw considerable weakness, however, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index falling by 1.5 percent and 1.4 percent, respectively.

Significant weakness was also visible among semiconductor stocks, as reflected by the 1.2 percent drop by the Philadelphia Semiconductor Index.

Micron Technology (MU) led the semiconductor sector lower after Goldman Sachs downgraded its rating on the chipmaker's stock to Neutral from Buy.

On the other hand, gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.6 percent.

The rally by gold stocks came amid a notable increase by the price of the precious metal, with gold for December delivery climbing $8.70 to $1,208.20 an ounce.

Steel and telecom stocks also saw notable strength, while energy stocks also moved higher along with the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both fell by 0.3 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index jumped by 0.9 percent, the U.K.'s FTSE 100 Index and the German DAX Index rose by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries regained ground after moving notably lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.4 basis points to 2.963 percent.

Looking ahead, trading on Thursday may be impacted by reaction to reports on weekly jobless claims and consumer price inflation.

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