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U.S. Stocks Close Roughly Flat Following Another Choppy Session

wallstreet oct30 10sep19 lt

Stocks experienced another lackluster performance during trading on Tuesday, eventually closing mixed for the third consecutive session. The major averages recovered from an early move to the downside but still ended the day roughly flat.

Despite a late-day surge, the tech-heavy Nasdaq edged down 3.28 points or less than a tenth of a percent to 8,084.16. Meanwhile, the Dow rose 73.92 points or 0.3 percent to 26,909.43 and the S&P 500 inched up 0.96 points or less than a tenth of a percent to 2,979.39.

The early weakness on Wall Street partly reflected uncertainty ahead of the European Central Bank's monetary policy decision on Thursday as well as next week's Federal Reserve meeting.

Both the ECB and the Fed are expected to cut interest rates in reaction to recent indications of a slowdown by the global economy.

With the major averages back within striking distance of record highs, traders may be questioning whether stocks will see further upside in an economy that requires support from global central banks to avoid recession.

Selling pressure remained somewhat subdued, however, with some traders sticking to the sidelines amid another quiet day on the U.S. economic front.

The weaker than expected jobs data released last Friday raised concerns about the economic outlook but also reinforced expectations of another interest rate cut by the Fed next week.

Reports on producer and consumer price inflation, retail sales, and consumer sentiment are likely to attract attention in the coming days.

Stocks showed a notable recovery after a report from the South China Morning Post said China is expected to agree to buy more American agricultural products in hopes of a better trade deal.

A source familiar with the situation told the SCMP working-level officials are discussing the text of a deal that would be reviewed at the high-level meeting scheduled for next month.

However, Scott Kennedy, senior adviser with the Washington-based Centre for Strategic and International Studies, warned that a deal on soybeans won't dispel distrust between Beijing and Washington.

Sector News

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

Steel stocks showed a substantial move to the upside, however, with the NYSE Arca Steel Index surging up by 3.1 percent to its best closing level in over a month.

Notable strength also emerged among banking stocks, as reflected by the 1.7 percent gain posted by the KBW Bank Index. The index also reached a one-month closing high.

Tobacco, biotechnology, and transportation stocks also saw some strength on the day, while weakness remained visible among commercial real estate and software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index slipped by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index inched up by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index both climbed by 0.4 percent.

In the bond market, treasuries extended the notable downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8 basis points to 1.702 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to the Labor Department's report on producer price inflation in the month of August.

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