Reflecting the focus on developments in Washington due to the looming fiscal cliff, stocks bounced well off their early lows following optimistic comments by House Speaker House John Boehner. Buying interest has waned since then, however, and the markets are nearly flat.
The major averages have moved roughly sideways in recent trading, lingering near the unchanged line. While the Dow is up 13.63 points or 0.1 percent at 12,891.76, the Nasdaq is down 2.09 points or 0.1 percent at 2,965.70 and the S&P 500 is down 0.92 points or 0.1 percent at 1,398.02.
The early weakness on Wall Street reflected lingering concerns about the fiscal cliff amid indications that lawmakers are encountering familiar disagreements over taxes on the wealthy and entitlement reform.
Senate Majority Leader Harry Reid, D-Nev., said Tuesday that lawmakers have made "little progress" on addressing the fiscal cliff, while his Republican counterpart Mitch McConnell, R-Ken., accused Democrats of remaining in campaign mode.
However, stocks staged a notable recovery following remarks by Speaker Boehner, who said he was "optimistic" that a deal could be reached to avert the crisis.
Boehner continued to express opposition to higher U.S. income tax rates but once again expressed a willingness to consider increasing revenues if accompanied by spending cuts.
"You're not going to grow the economy if you raise tax rates on the top two rates," Boehner said. "We're willing to put revenue on the table, as long as we're not raising rates."
As a result of the focus on the negotiations in Washington, traders have largely shrugged off a report from the Commerce Department that unexpectedly showed a modest drop by new home sales in the month of October.
The report said new home sales edged down 0.3 percent to a seasonally adjusted annual rate of 368,000 in October from the revised September rate of 369,000. The annual rate of new home sales in September was downwardly revised from the previously reported 389,000, which had represented a two-year high.
Economists had been expecting new home sales to inch up to 390,000 from the 389,000 originally reported for the previous month.
Most of the major sectors are showing only modest moves, contributing to the roughly flat performance by the broader markets in recent trading.
While some strength is visible among brokerage and retail stocks, housing and computer hardware stocks have moved to the downside on the day.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.
Meanwhile, the major European markets turned higher over the course of the trading day. While the French CAC 40 Index rose by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index edged up by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries continue to see modest strength but have pulled back well off their highs for the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.2 basis points at 1.623 percent after hitting a low of 1.601 percent.
by RTT Staff Writer
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