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Major Averages Turning In Mixed Performance In Morning Trading - U.S. Commentary


Following the significant weakness seen in the previous session, stocks are turning in a lackluster performance in morning trading on Tuesday. The Dow and the Nasdaq have moved in opposite directions, while the S&P 500 is bouncing back and forth across the unchanged line.

Currently, the major averages are mixed. While the Dow is up 106.59 points or 0.4 percent at 24,634.81, the Nasdaq is down 31.23 points or 0.4 percent at 7,054.46 and the S&P 500 is down 0.61 points or less than a tenth of a percent at 2,643.24.

The choppy trading on Wall Street reflects a mixed reaction to earnings news from big-name companies such as 3M (MMM), Pfizer (PFE), and Verizon (VZ).

Traders may also be reluctant to make more significant moves ahead of the release of quarterly results from tech giant Apple (AAPL) after the close of trading.

The Federal Reserve's impending monetary policy announcement on Wednesday is also keeping some traders on the sidelines along with the upcoming release of the Labor Department's monthly jobs report on Friday.

Traders also continue to express uncertainty about trade talks between the U.S. and China after the Justice Department unsealed sweeping criminal charges against Chinese tech giant Huawei and its chief financial officer Meng Wanzhou.

On the U.S. economic front, the Conference Board released a report showing a substantial deterioration in consumer confidence in the month of January.

The Conference Board said its consumer confidence index slumped to 120.2 in January after tumbling to a revised 126.6 in December.

Economists had expected the consumer confidence index to fall to 124.3 from the 128.1 originally reported for the previous month.

Lynn Franco, Senior Director of Economic Indicators at the Conference Board, noted expectations saw a significant drop due to financial market volatility and the government shutdown.

"Shock events such as government shutdowns (i.e. 2013) tend to have sharp, but temporary, impacts on consumer confidence," Franco said.

She added, "Thus, it appears that this month's decline is more the result of a temporary shock than a precursor to a significant slowdown in the coming months."

Most of the major sectors are showing only modest moves in morning trading, contributing to the lackluster performance by the broader markets.

Gold stocks are seeing significant strength, however, with the NYSE Arca Gold Bugs Index surging up by 1.9 percent to a nearly six-month intraday high.

The rally by gold stocks comes amid a continued increase by the price of the precious metal, as gold for February delivery is climbing $7.30 to $1,310.40 an ounce.

Steel and oil service stocks are also seeing notable strength, while some weakness has emerged among software and housing stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance during trading on Tuesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are jumping by 1.1 percent and 1.6 percent, respectively.

In the bond market, treasuries are extending the modest upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.3 basis points at 2.731 percent.

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