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Major Averages Turning In Another Mixed Performance In Mid-Day Trading

wallstreet aug23 10aug21 lt

The Dow and the S&P 500 have risen to new record intraday highs during trading on Tuesday, while the tech-heavy Nasdaq has moved to the downside. The major U.S. stock indexes are subsequently turning in a mixed performance for the third straight session.

Currently, the major averages remain on opposite sides of the unchanged line. While the Nasdaq is down 60.94 points or 0.4 percent at 14,799.23, the Dow is up 148.30 points or 0.4 percent at 35,250.15 and the S&P 500 is up 8.51 points or 0.2 percent at 4,440.86.

The advances by the Dow and the S&P 500 may partly reflect continued economic optimism following last Friday's upbeat monthly jobs data.

News that the Senate has approved a $1 trillion infrastructure bill may also have generated some positive sentiment. The package now heads to the House, where it faces an uncertain future.

Buying interest has remained somewhat subdued, however, as traders look ahead to the release of a Labor Department report on consumer price inflation in the month of July on Wednesday.

Economists currently expect consumer prices to climb by 0.5 percent in July after advancing by 0.9 percent in June. The annual rate of consumer price growth is expected to slow to 5.3 percent from 5.4 percent.

Core consumer prices, which exclude food and energy prices, are expected to rise by 0.4 percent in July following a 0.9 percent increase in June. Year-over-year core price growth is expected to drop to 4.3 percent from 4.5 percent.

The Labor Department is scheduled to release a separate report on producer price inflation in the month of July on Thursday.

The inflation data could have an impact on the outlook for monetary policy, although the next Federal Reserve meeting is not scheduled until September.

Concerns the Fed may begin scaling back its asset purchases sooner than currently expected may be weighing on high-growth tech stocks.

Sector News

Steel stocks have moved sharply higher over the course of the session, driving the NYSE Arca Steel Index up by 3.3 percent to its best intraday level in three months.

Considerable strength is also visible among oil service stocks, as reflected by the 2.5 percent jump by the Philadelphia Oil Service Index.

The rally by oil service stocks comes amid a rebound by the price of crude oil, with crude for September delivery surging up $1.96 to $68.44 a barrel after tumbling $1.80 to $66.48 a barrel on Monday.

Transportation stocks are also turning in a strong performance in mid-day trading, resulting in a 1.8 percent advance by the Dow Jones Transportation Average.

Kansas City Southern (KSU) has helped lead the sector higher after Canadian Pacific Railway (CP) raised its offer to acquire the railway operator to about $300 per share.

Housing, banking and natural gas stocks are also seeing notable strength in mid-day trading, while weakness among biotechnology and semiconductor stocks is contributing to the drop by the tech-heavy Nasdaq.

The NYSE Arca Biotechnology Index and the Philadelphia Semiconductor Index are currently down by 1.5 percent and 1.3 percent, respectively.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index edged up by 0.2 percent as trading resumed following a long weekend, while China's Shanghai Composite Index jumped by 1 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index ticked up by 0.2 percent and the French CAC 40 Index inched up by 0.1 percent.

In the bond market, treasuries are extending the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.2 basis points at 1.339 percent.

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