Major Averages Narrowly Mixed As Fed Minutes Loom

wallstreetmarch0220 23nov22 lt

After moving to the upside early in the session, stocks have fluctuated over the course of the trading day on Wednesday. The major averages have pulled back off their early highs and spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 24.75 points or 0.1 percent at 34,073.55, the S&P 500 is up 4.03 points or 0.1 percent at 4,007.61 and the Nasdaq is up 38.10 points or 0.3 percent at 11,212.51.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting at 2 pm ET.

The Fed's early November meeting was conducted before the recent release of tamer-than-expected inflation data, but traders are still likely to look to the minutes for confirmation the central bank plans to slow the pace of interest rate hikes as soon as next month.

The Thanksgiving Day holiday on Thursday may also be contributing to the lackluster, as some traders are likely away from their desks for travel.

Traders are also digesting a mixed batch of U.S. economic data, including a Commerce Department report showing new orders for manufactured durable goods jumped by much more than expected in the month of October.

The report said durable goods orders shot up by 1.0 percent in October after rising by a downwardly revised 0.3 percent in September.

Economists had expected durable goods orders to climb by 0.4 percent, matching the increase that had been reported for the previous month.

Excluding a surge in orders for transportation equipment, durable goods orders rose by 0.5 percent in October after slumping by 0.9 percent in September. Ex-transportation orders were expected to be unchanged.

A separate Commerce Department report unexpectedly showed a substantial rebound in new home sales in the month of October.

The Commerce Department said new home sales spiked by 7.5 percent to an annual rate of 632,000 in October after plunging by 11.0 percent to a revised rate of 588,000 in September.

The sharp increase came as a surprise to economists, who had expected new home sales to tumble by 5.5 percent to a rate of 570,000 from the 603,000 originally reported for the previous month.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits increased by more than expected in the week ended November 19th.

The report said initial jobless claims rose to 240,000, an increase of 17,000 from the previous week's revised level of 223,000. Economists had expected jobless claims to inch up to 225,000 from the 222,000 originally reported for the previous week.

With the bigger than expected increase, jobless claims reached their highest level since hitting 245,000 in the week ended August 13th.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Energy stocks are seeing substantial weakness, however, with a sharp pullback by the price of crude oil weighing on the sector.

With crude for January delivery plunging $3.39 to $77.56 a barrel, the Philadelphia Oil Service Index is down by 3.5 percent and the NYSE Arca Oil Index is down by 1.5 percent.

On the other hand, tobacco stocks have shown a significant move to the upside on the day, driving the NYSE Arca Tobacco Index up by 2.6 percent to a three-month intraday high.

Computer hardware stocks are also seeing some strength following upbeat earnings news from computer and printer market HP Inc. (HPQ).

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index rose by 0.3 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

European stocks also showed modest moves to the upside on the day. While the German DAX Index closed just above the unchanged line, the U.K.'s FTSE 100 Index and the French CAC 40 Index edged up by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries modestly higher after seeing significant volatility earlier in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 3.741 percent.

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