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U.S. Stocks Close Mixed Following Lackluster Session

wallstreet aug31 14jan20 lt

Stocks showed a lack of direction throughout the trading session on Tuesday, with the major averages spending the day bouncing back and forth across the unchanged line before eventually closing mixed.

The Dow reached a record intraday high but pulled back off its best levels to end the day up just 32.62 points or 0.1 percent at 28,939.67.

Meanwhile, the Nasdaq and the S&P 500 pulled back off Monday's record closing highs. The Nasdaq slipped 22.60 points or 0.2 percent to 9,251.33 and the S&P 500 edged down 4.98 points or 0.2 percent to 3,283.15.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves as they digested quarterly results from several big-name financial companies.

Shares of JPMorgan Chase (JPM) saw notable strength on the day after the financial giant reported better than expected fourth quarter results.

Citigroup (C) also showed a strong move to the upside after reporting fourth quarter results that beat analyst estimates on both the top and bottom lines.

On the other hand, shares of Wells Fargo (WFC) moved sharply lower after the banking giant reported fourth quarter results that missed expectations.

Stocks saw some volatility in afternoon trading after a report from Bloomberg said tariffs on billions of dollars of Chinese goods are likely to remain in place until after the U.S. elections in November.

Citing people familiar with the matter, Bloomberg said any move to reduce the tariffs would hinge on China's compliance with the terms of a phase one trade deal set to be signed on Wednesday.

Under the phase one deal, the U.S. will scrap a new round of tariffs and cut the tariffs on $120 billion worth of Chinese goods in half to 7.5 percent, but a 25 percent tariff on $250 billion worth of Chinese imports will remain in place.

The people told Bloomberg the U.S. will not consider cutting the remaining tariffs until conducting a review no sooner than 10 months after the signing of the agreement.

In U.S. economic news, the Labor Department released a report showing consumer prices in the U.S. increased by slightly less than anticipated in the month of December.

The Labor Department said its consumer price index rose by 0.2 percent in December after climbing by 0.3 percent in November. Economists had been expecting another 0.3 percent increase.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in December after rising by 0.2 percent in November. Core prices had been expected to rise by another 0.2 percent.

Later this week, traders are likely to keep a close eye on reports on retail sales, housing starts, and industrial production.

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

However, biotechnology stocks showed a significant rebound after bucking the uptrend seen in the previous session, with the NYSE Arca Biotechnology Index spiking by 2.7 percent after tumbling by 2 percent on Monday.

Gold, natural gas and transportation stocks also saw notable strength on the day, while some weakness was visible among software and tobacco 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 climbed by 0.7 percent, while China's Shanghai Composite Index dipped by 0.3 percent.

Meanwhile, the major European markets ended a choppy session slightly higher. While the German DAX Index closed just above the unchanged line, the U.K.'s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries moved back to the upside following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3 basis points to 1.818 percent.

Looking Ahead

Any news out of the trade deal signing is likely to attract attention on Wednesday, potentially overshadowing the Labor Department's report on producer prices.

The Federal Reserve is also scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

On the earnings front, Bank of America (BAC), Goldman Sachs (GS), and UnitedHealth (UNH) are among the companies due to report their quarterly results before the start of trading on Wednesday.

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