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Stocks Turning In A Lackluster Performance In Mid-Day Trading - U.S. Commentary

wallstreet1 103112 21Jan14

After failing to sustain an initial upward move, stocks have fluctuated over the course of the trading day on Tuesday and are turning in a lackluster performance in mid-day trading.

The major averages are currently mixed, with the tech-heavy Nasdaq posting a slim gain. While the Nasdaq is up 3.28 points or 0.1 percent at 4,200.87, the Dow is down 127.38 points or 0.8 percent at 16,331.18 and the S&P 500 is down 4.25 points or 0.2 percent at 1,834.45.

The initial strength on Wall Street came on the heels of the release of better than expected quarterly results from well-known companies such as Delta Air Lines (DAL) and Verizon (VZ).

News that the International Monetary Fund upwardly revised its forecast for global economic growth in 2014 to 3.7 percent also generated some positive sentiment.

Buying interest waned not long after the open, however, as traders seemed reluctant to make any significant moves amid a lack of major U.S. economic data.

The economic calendar remains relatively quiet throughout much of the holiday-shortened week, although reports on weekly jobless claims and existing home sales are likely to attract some attention on Thursday.

Notable losses by Verizon, Johnson & Johnson (JNJ) and Travelers (TRV) are weighing on the Dow, with all three stocks moving lower even though the companies reported better than expected fourth quarter earnings.

Sector News

While many of the major sectors are showing only modest moves, considerable weakness has emerged among steel stocks. The NYSE Arca Steel Index has tumbled by 2.3 percent to its lowest intraday level in over a month.

Brazil's Companhia Siderurgica Nacional (SID) and Cliffs Natural Resources (CLF) are turning in two of the steel sector's worst performances.

Housing stocks have also come under pressure on the day, dragging the Philadelphia Housing Sector Index down by 1 percent.

On the other hand, gold stocks are turning in a strong performance, resulting in a 1.5 percent gain by the NYSE Arca Gold Bugs Index. The gains by gold stocks come despite a decrease by the price of the precious metal.

Tobacco and biotechnology stocks are also seeing some strength on the day, with the NYSE Arca Tobacco Index and the NYSE Arca Biotechnology Index up by 1.3 percent and 1.2 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 advanced by 1 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by less than a tenth of a percent, the French CAC 40 Index closed just above the unchanged line and the German DAX Index rose by 0.2 percent.

In the bond market, treasuries are turning in a lackluster performance due to the lack of economic news. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is currently unchanged at 2.827 percent.

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