Major Averages Turning In Mixed Performance In Mid-Day Trading

wallstreet july16 16dec20

After showing a lack of direction early in the session, stocks continue to turn in a lackluster performance in mid-day trading on Wednesday. While the Nasdaq and the S&P 500 have moved modestly higher, the Dow has spent the day lingering near the unchanged line.

Currently, the major averages are turning in a mixed performance. The Dow is down 39.56 points or 0.1 percent at 30,159.75, while the Nasdaq is up 52.82 points or 0.4 percent at 12,647.88 and the S&P 500 is up 7.94 points or 0.2 percent at 3,702.56.

The choppy trading on Wall Street comes as traders weigh optimism about a new fiscal stimulus bill against disappointing retail sales data.

After a meeting of congressional leaders on Tuesday, both Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer expressed optimism that an agreement can be reached "soon."

Traders have remained optimistic that lawmakers will eventually reach an agreement even though a deal on a new relief package has remained beyond their grasp for months.

However, the Commerce Department released a report before the start of trading showing retail sales slumped by much more than expected in the month of November.

The Commerce Department said retail sales tumbled by 1.1 percent in November following a revised 0.1 percent dip in October.

Economists had expected retail sales to slip by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.

Excluding a decrease in sales by motor vehicle and parts dealers, retail sales still fell by 0.9 percent in November. Ex-auto sales were expected to inch up by 0.1 percent.

The National Association of Home Builders also released a report showing homebuilder confidence pulled back by more than expected in December after reaching a record high in November.

The lackluster performance also comes as traders look ahead to the announcement of the Federal Reserve's latest monetary policy decision this afternoon.

The Fed is widely expected to leave interest rates unchanged, but traders are hopeful the central bank will provide further accommodation by focusing more asset purchases on the long end of the Treasury yield curve.

Sector News

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

Software stocks are turning in a strong performance on the day, however, with the Dow Jones U.S. Software Index climbing by 1.8 percent to its best intraday level in over a month.

On the other hand, considerable weakness remains visible among airline stocks, as reflected by the 1.5 percent drop by the NYSE Arca Airline Index.

United Airlines (UAL), JetBlue (JBLU) and Spirit Airlines (SAVE) are posting notable losses after JPMorgan downgraded its ratings on the airline stocks to Underweight from Overweight.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index jumped by 1 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index surged up by 1.5 percent, the U.K.'s FTSE 100 Index advanced by 0.9 percent and the French CAC 40 Index rose by 0.3 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 0.921 percent.

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