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U.S. Stocks Turn Positive After Seeing Initial Weakness

wallstreet4 10dec19 lt

After an early move to the downside, stocks have shown a lack of direction over the course of morning trading on Tuesday. The major averages bounced off their early lows and into positive territory, but buying interest has waned since then.

Currently, the major averages are holding on to modest gains. The Dow is up 12.68 points or 0.1 percent at 27,922.28, the Nasdaq is up 22.51 points or 0.3 percent at 8,644.33 and the S&P 500 is up 3.40 points or 0.1 percent at 3,139.36.

The volatility on Wall Street comes as traders digest the latest news on the trade front, with the early turnaround coming after House Democrats announced an agreement on President Donald Trump's trade deal with Canada and Mexico.

House Speaker Nancy Pelosi, D-Calif., announced the deal on the United States-Mexico-Canada Agreement, or USMCA, Trump's replacement for the North American Free Trade Agreement, or NAFTA.

The news of the USMCA deal comes on the heels of conflicting reports regarding trade talks between the U.S. and China.

Shortly before the start of trading, a report from the Wall Street Journal said the U.S. plans to delay imposing additional tariffs on Chinese goods.

Citing officials on both sides, the Journal said negotiators are laying the groundwork for delaying the tariffs set to kick in on December 15th as they continue to haggle over getting China to commit to massive purchases of U.S. farm products.

An earlier report from the South China Morning Post said a trade deal between the U.S. and China is unlikely to be completed this week.

However, the SCMP said sources close to the talks do not expect the tariffs planned for December 15th to take effect, adding to a growing chorus on both sides who expect de-escalation this week.

Reflecting the lack of direction being shown by the broader markets, most of the major sectors are showing only modest moves on the day.

Energy stocks are seeing some strength on the day, however, with the sector extending the upward trend seen over the past few sessions.

Semiconductor and biotechnology stocks have also moved to the upside, while some weakness is visible among commercial real estate stocks.

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

The major European markets have also turned mixed on the day. While the French CAC 40 Index has risen by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.3 percent.

In the bond market, treasuries have shown a lack of direction over the course of the morning. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.835 percent.

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