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U.S. Stocks Continue To Show A Lack Of Direction


Stocks reached new record intraday highs in early trading on Monday but have shown a lack of direction over the course of the session since then. The major averages have spent most of the day bouncing back and forth across the unchanged line.

Currently, the major averages are on opposite sides of the unchanged line. While the Nasdaq is up 2.52 points or less than a tenth of a percent at 8,246.67, the Dow is down 20.18 points or 0.1 percent at 27,311.85 and the S&P 500 is down 3.02 points or 0.1 percent at 3,010.75.

The initial strength on Wall Street partly reflected a positive reaction to earnings news from Citigroup (C), with the financial giant reporting second quarter results that beat analyst estimates on both the top and bottom lines.

Buying interest waned shortly after the start of trading, however, as traders seem reluctant to make more significant moves ahead of the release of quarterly results from a slew of other big-name companies.

Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan (JPM), Kraft Heinz (KHC), IBM (IBM), Microsoft (MSFT), and America Express (AXP) are among the companies due to report their results this week.

Closely watched reports on retail sales, industrial production, homebuilder confidence and housing starts are also likely to attract attention over the next few days.

On the U.S. economic front, the Federal Reserve Bank of New York released a report before the start of trading showing regional manufacturing activity rebounded modestly in the month of July.

The New York Fed said its general business conditions index climbed to 4.3 in July from a negative 8.6 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to a positive 2.0.

The bigger than expected rebound by the general business conditions index came after it recorded its first negative reading in over two years in the previous month.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Natural gas stocks are seeing considerable weakness, however, with the NYSE Arca Natural Gas Index slumping by 1.3 percent.

Oil and gas company Callon Petroleum (CPE) is posting a steep loss after agreeing to acquire Carrizo Oil & Gas (CRZO) in an all-stock transaction valued at $3.2 billion.

Banking stocks have also shown a notable move to the downside on the day, while significant strength has emerged among biotechnology stocks.

Within the biotech sector, Galapagos (GLPG) is soaring after Gilead Sciences (GILD) agreed to invest $5.1 billion in the company as part of a 10-year global research and development collaboration.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index rose by 0.4 percent, while Australia's S&P/ASX 200 Index slid by 0.7 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index rose by 0.3 percent and the German DAX Index climbed by 0.5 percent.

In the bond market, treasuries have shown a slight uptick after moving modestly higher over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by nearly a basis point at 2.097 percent.

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