Major Averages Turning In Mixed Performance In Mid-Day Trading

wallstreet oct25 27oct21 lt

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 tech-heavy Nasdaq remains in positive territory, the Dow has moved to the downside.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is up 68.99 points or 0.5 percent at 15,304.70, but the Dow is down 124.87 points or 0.4 percent at 35,632.01 and the S&P 500 is down 2.74 points or 0.1 percent at 4,572.05.

The choppy trading on Wall Street partly reflects a mixed reaction to the release of a slew of earnings news from big-name companies.

Shares of Microsoft (MSFT) have moved notably higher after the software giant reported fiscal first quarter results that beat analyst estimates on both the top and bottom lines.

Google parent Alphabet (GOOGL) has also shown a strong move to the upside after the company reported better than expected third quarter results.

On the other hand, shares of Twitter (TWTR) are sharply lower after the social media reported third quarter earnings that beat estimates but weaker than expected user growth.

Auto giant General Motors (GM) has also come under pressure after reporting third quarter earnings and revenues that fell year-over-year.

Uncertainty about the near-term outlook for the markets may be keeping some traders on the sidelines following the recent upward trend, which has lifted the Dow and the S&P 500 to new record highs.

With the Federal Reserve's monetary policy meeting looming next week, traders may be reluctant to continue buying stocks, as the central bank could announce plans to begin scaling back its asset purchases.

On the U.S. economic front, the Commerce Department released a report showing durable goods orders pulled back by much less than expected in the month of September.

The Commerce Department said durable goods orders fell by 0.4 percent in September after jumping by a downwardly revised 1.3 percent in August.

Economists had expected durable goods orders to slump by 1.1 percent compared to the 1.8 percent spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders climbed by 0.4 percent in September after rising by 0.3 percent in August. The increase matched economist estimates.

Sector News

Banking stocks have come under pressure over the course of the session, resulting in a 1.9 percent slump by the KBW Bank Index. The index continues to give back ground after reaching a record intraday high on Monday.

A steep drop by the price of crude oil is also weighing on energy stocks, with crude for December delivery tumbling $1.38 to $83.27 a barrel after a report showing a bigger than expected weekly increase in crude oil inventories.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 1.9 percent and the NYSE Arca Oil Index is down by 1.4 percent.

Biotechnology, steel and telecom stocks have also moved to the downside on the day, while software stocks are seeing considerable strength following the upbeat results from Microsoft.

Networking stocks also continue to turn in a strong performance in mid-day trading, with the NYSE Arca Networking Index climbing by 1.7 percent.

F5 Networks (FFIV) has helped lead the sector higher after reporting fourth quarter results that exceeded estimates and providing upbeat guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Japan's Nikkei 225 Index closed just below the unchanged line, China's Shanghai Composite Index slumped by 1 percent and Hong Kong's Hang Seng Index tumbled by 1.6 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index dipped by 0.2 percent, the German DAX Index and the U.K.'s FTSE 100 Index both fell by 0.3 percent.

In the bond market, treasuries have moved notably higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.7 basis points at 1.562 percent.

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