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Stocks Close Roughly Flat After Choppy Trading Day - U.S. Commentary


After seeing considerable volatility over the course of the two previous sessions, stocks turned in a lackluster performance during trading on Wednesday before closing roughly flat.

The major averages ended the day mixed, although they were all nearly unchanged. While the Nasdaq edged down 3.10 points or 0.1 percent to 3,168.48, the Dow inched up 7.22 points or 0.1 percent to 13,986.52 and the S&P 500 crept up 0.83 points or 0.1 percent to 1,512.12.

The choppy trading on Wall Street came as traders expressed some uncertainty about the outlook for the markets after recent strength lifted the Dow and the S&P 500 to five-year highs.

Following the big swings back and forth seen over the course of the two previous sessions, traders seemed reluctant to make any significant moves.

Uncertainty about the financial situation in Europe helped to keep traders on the sidelines ahead of Thursday's monetary policy announcement from the European Central Bank.

Along with the monetary policy meeting, the leaders of the European Union member states are due to hold a two-day meeting in Brussels beginning on Thursday.

Amid a lack of major U.S. economic data, traders also kept a close eye on the latest batch of earnings news.

Shares of C.H. Robinson Worldwide (CHRW) moved sharply lower after the freight and shipping company reported fourth quarter earnings that missed estimates.

Insurance company Aflac (AFL) also posted a notable loss after reporting fourth quarter adjusted earnings that matched expectations but on weaker than expected revenues.

Meanwhile, shares of Zynga (ZNGA) moved sharply higher after the social gaming company reported an unexpected fourth quarter profit. The company also provided upbeat revenue guidance.

Disney (DIS) also moved to the upside after reporting first quarter earnings that fell year-over-year but came in above analyst estimates. The entertainment giant also reported better than expected revenue growth.

Sector News

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

Airline stocks saw considerable strength on the day, however, resulting in a 1.7 percent gain by the NYSE Arca Airline Index. United Continental (UAL) and Delta Air Lines (DAL) turned in two of the sector's best performances.

Significant strength was also visible among steel stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Steel Index. Reliance Steel (RS) helped to lead the sector higher after announcing an agreement to acquire Metals USA Holdings Corp. (MUSA) for about $766 million.

Computer hardware and healthcare provider stocks also saw some strength on the day, while modest weakness was visible among software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index soared by 3.8 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

Meanwhile, the major European markets ended the day mixed. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.1 percent and 1.4 percent, respectively.

In the bond market, treasuries ended the day notably higher, rebounding after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.8 basis points to 1.968 percent.

Looking Ahead

Trading on Thursday could be impacted by the ECB's monetary policy announcement, although the central bank is expected to keep interest rates unchanged.

Following today's lack of major U.S. economic data, traders are also likely to keep an eye on the release of reports on weekly jobless claims and labor productivity.

On the earnings front, Allstate (ALL), Prudential (PRU), and Visa (V) are among the companies releasing their quarterly results after the close of today's trading, while Cigna (CI) and Sprint Nextel (S) are among those due to report before the start of trading on Thursday.

by RTTNews Staff Writer

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