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

wallstreet3 09dec19 lt

After showing a lack of direction earlier in the session, stocks continue to experience choppy trading in the early afternoon on Monday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest losses. The Dow is down 65.81 points or 0.2 percent at 27,949.25, the Nasdaq is down 5.22 points or 0.1 percent at 8,651.31 and the S&P 500 is down 2.39 points or 0.1 percent at 3,143.52.

The lackluster performance on Wall Street comes as traders seem reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, although traders are still likely to pay close attention to the accompanying statement for clues about the outlook for rates.

A lack of major U.S. economic data may also be keeping some traders on the sidelines ahead of the release of reports on retail sales and consumer and producer prices in the coming days.

Traders are also exhibiting some caution amid lingering uncertainty about U.S.-China trade talks, as new 15 percent tariffs on $165 billion worth of Chinese imports are currently still set to take effect this coming Sunday.

The new round of tariffs could throw a wrench in negotiations over a phase on trade deal, which is reportedly being held up in part by a dispute over how much to roll back existing tariffs.

Rising tensions between the U.S. and North Korea are also on the minds of traders after North Korea conducted a "very important test" at a long-range missile launch site.

President Donald Trump warned North Korean leader Kim Jong Un risks losing "everything" if he acts in a hostile way, leading a North Korean official to describe the president as a "heedless and erratic old man."

Sector News

Most of the major sectors continue to show only moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Energy stocks are seeing notable strength, however, with the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index climbing by 1.4 percent and 1.1 percent, respectively.

The strength among energy stocks comes despite a modest decrease by the price of crude oil, as crude for January delivery is slipping $0.13 to $59.07 a barrel.

Steel stocks are also seeing some strength on the day, driving the NYSE Arca Steel Index up by 1.1 percent to its best intraday level in over four months.

On the other hand, brokerage and biotechnology stocks are seeing moderate weakness, although selling pressure remains subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved modestly higher during trading on Monday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

Meanwhile, the major European markets moved to the downside on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index fell by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries are regaining some ground following recent weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 1.824 percent.

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