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Major Averages Continue To Turn In Mixed Performance - U.S. Commentary


Stocks continue to turn in a mixed performance in mid-day trading on Wednesday after moving in opposite directions earlier in the session. While the Dow remains in negative territory, the Nasdaq and the S&P 500 are holding on to gains.

Currently, the Dow is down 47.38 points or 0.2 percent at 24,652.83, but the Nasdaq is up 59.55 points or 0.8 percent at 7,785.14 and the S&P 500 is up 7.05 points or 0.3 percent at 2,769.64.

The mixed performance on Wall Street comes as traders as continue to worry about an escalating trade dispute between the U.S. and China.

President Donald Trump has directed U.S. Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.

Trump said the tariffs will go into effect if China refuses to change its unfair trade practices and insists on going forward with recently announced tariffs.

The president threatened to pursue additional tariffs on another $200 billion worth of goods if China increases its tariffs yet again.

Despite the threat from Trump, China vowed to retaliate with "strong" countermeasures if the U.S. goes ahead with the new tariffs.

On the U.S. economic front, the National Association of Realtors released a report showing an unexpected decrease in existing home sales in the month of May.

NAR said existing home sales fell by 0.4 percent to an annual rate of 5.43 million in May after plunging by 2.7 percent to a downwardly revised 5.45 million in April.

The drop surprised economists, who had expected existing home sales to climb to an annual rate of 5.52 million from the 5.46 million originally reported for the previous month.

Sector News

Reflecting the lackluster performance being turned in by the broader markets, most of the major sectors are showing only modest moves on the day.

Natural gas stocks have shown a strong move to the upside, however, with the NYSE Arca Natural Gas Index climbing by 1.3 percent. The index has reached its best intraday level in almost a month.

The strength in the natural gas sector comes amid an increase by the price of the commodity, as natural gas for July delivery is rising $0.062 to $2.962 per million BTUs.

Retail, biotechnology, and real estate stocks are also seeing some strength in mid-day trading, while weakness is visible among chemical 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 jumped by 1.2 percent, and Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index fell by 0.3 percent, the German DAX Index inched up by 0.1 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.

In the bond market, treasuries are giving back ground following the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 2.910 percent.

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