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U.S. Stocks Close Mixed Following Choppy Trading Session

wallstreet higher 050119 19nov19 lt

After moving modestly higher over the course of the previous session, stocks showed a lack of direction during trading on Tuesday. The major averages spent most of the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session mixed. While the Nasdaq rose 20.72 points or 0.2 percent to a new record closing high of 8,570.66, the Dow fell 102.20 points or 0.4 percent to 27,934.02 and the S&P 500 edged down 1.85 points or 0.1 percent to 3,120.18.

Stocks initially moved to the upside amid recent upward momentum, which has helped propel stocks to record highs amid unshakable optimism about a potential U.S.-China trade deal.

Buying interest waned shortly after the start of trading, however, with disappointing results from Home Depot (HD) offsetting the positive sentiment.

Shares of Home Depot moved sharply lower after the home improvement retailer reported weaker than expected third quarter revenues and lowered its full-year sales forecast.

Department store chain Kohl's (KSS) also posted a steep loss after reporting weaker than expected third quarter results and cutting its annual guidance.

Meanwhile, in a continuation of the market' recent trend of shrugging off negative news on the trade front, traders seemed unfazed by President Donald Trump threatening higher tariffs on Chinese goods if an agreement is not reached.

"If we don't make a deal with China, I'll just raise the tariffs even higher," Trump said during a cabinet meeting at the White House.

In U.S. economic news, the Commerce Department released a report before the start of trading showing a substantial rebound in new residential construction in the month of October.

The Commerce Department said housing starts surged up by 3.8 percent to an annual rate of 1.314 million in October after plunging by 7.9 percent to a revised rate of 1.266 million in September.

Economists had expected housing starts to jump by 5.1 percent to a rate of 1.320 million from the 1.256 million originally reported for the previous month.

The report also said building permits spiked by 5.0 percent to an annual rate of 1.461 million in October after tumbling by 2.4 percent to a revised rate of 1.391 million in September.

Building permits, an indicator of future housing demand, had been expected to edge down by 0.1 percent to a rate of 1.385 million from the 1.387 million originally reported for the previous month.

Sector News

Most of the major sectors ended the day showing only modest moves, although natural gas stocks showed another substantial move to the downside.

Extending the steep drop seen in the previous session, the NYSE Arca Natural Gas Index plunged by 2.9 percent to its lowest closing level in well over fourteen years.

The continued sell-off by natural gas stocks came as the price of natural gas for December delivery slid $0.056 or 2.2 percent to $2.510 per million BTUs.

A sharp decline by the price of crude oil also contributed to weakness throughout the energy sector, with crude for December delivery plunging $1.84 to $55.21 a barrel.

Reflecting the weakness in the sector, the NYSE Arca Oil Index and the NYSE Arca Oil Service Index slumped by 1.6 percent and 1.3 percent, respectively.

On the other hand, biotechnology stocks showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.5 percent to a four-month closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.6 percent.

The major European markets also ended the day mixed. While the French CAC 40 Index dipped by 0.4 percent, the German DAX Index crept up by 0.1 percent and the U.K.'s FTSE 100 Index inched up by 0.2 percent.

In the bond market, treasuries moved to the upside over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 1.786 percent.

Looking Ahead

The minutes of the minutes of the Federal Reserve's latest monetary policy meeting may attract some attention on Wednesday, although the minutes are likely to reinforce the view that interest rates will be kept on hold for the near future.

Trading may be impacted by reaction to earnings news from retail giants Lowe's (LOW) and Target (TGT), which are due to report their quarterly results before the start of trading on Wednesday.

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