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Major Averages Turn Mixed After Seeing Initial Weakness - U.S. Commentary


After an initial move to the downside, stocks have regained some ground over the course of morning trading on Tuesday. The major averages have climbed off their lows of the session, with the Nasdaq and the S&P 500 reaching positive territory.

Currently, the major averages are turning in a mixed performance. While the Dow is down 36.68 points or 0.1 percent at 26,055.27, the Nasdaq is up 6.29 points or 0.1 percent at 7,560.75 and the S&P 500 is up 1.97 points or 0.1 percent at 2,798.08.

The initial weakness on Wall Street partly reflected lingering uncertainty about trade talks between the U.S. and China even after President Donald Trump decided to postpone an increase in tariffs on Chinese goods.

Trump and other officials have cited progress at recent meetings, although the chances the talks will result in a long-term trade agreement between the world's two largest economies remain unclear.

Questions about the impending summit between Trump and North Korean dictator Kim Jong Un added to the trepidation on Wall Street.

Selling pressure waned shortly after the start of trading, however, as traders kept an eye on Federal Reserve Chairman Jerome Powell's testimony before the Senate Banking Committee.

In his prepared remarks, Powell said the Fed continues to view economic conditions as healthy and the economic outlook as favorable but noted there have been some crosscurrents and conflicting signals over the past few months.

Powell pointed toward volatility in the financial markets, slowing growth in China and Europe, and uncertainty about Brexit and the U.S.-China trade talks.

Highlighting the Fed's recent "patient approach" to raising interest rates, Powell stressed future policy decisions will be data dependent and take into account new information as economic conditions and the outlook evolve.

The subsequent rebound on Wall Street came after a report from the Conference Board showed a substantial rebound in consumer confidence in the month of February.

The Conference Board said its consumer confidence index jumped to 131.4 in February after falling to 121.7 in January. Economists had expected the index to rise to 125.0.

A separate report from the Commerce Department showed housing starts plunged to a two-year low in December, although the government shutdown-delayed data may have been viewed as old news.

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

Gold stocks are seeing significant weakness, however, with the NYSE Arca Gold Bugs Index slumping by 1.2 percent.

The sell-off by gold stocks comes amid a decrease by the price of the precious metal, as gold for April delivery is falling $3 to $1,326.50 an ounce.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slid by 0.7 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index is down by 0.3 percent, the French CAC 40 Index is just above the unchanged line and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries have pulled back off their highs of the session but remain positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.9 basis points at 2.654 percent.

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