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


Stocks remain mostly positive in mid-day trading on Tuesday, although a steep drop by Boeing (BA) has contributed to a pullback by the Dow. The broader Nasdaq and S&P 500 are holding on to notable gains on the day.

Currently, the major averages are turning in a mixed performance. While the Dow is down 63.63 points or 0.3 percent at 25,587.25, the Nasdaq is up 39.79 points or 0.5 percent at 7,597.86 and the S&P 500 is up 12.09 points or 0.4 percent at 2,795.39.

The loss being posted by the Dow is largely due to a continued decline by Boeing (BA), with the aerospace giant tumbling by 6.5 percent after slumping by 5.3 percent on Monday.

The continued drop by Boeing comes after Edward Jones downgraded its rating on the company's stock to Hold from Buy, citing a possible "delay in orders" after the crash of the second of its 737 MAX jets in less than 6 months.

Meanwhile, the broader markets are benefiting from the release of tame inflation data, which suggests the Federal Reserve will continue to refrain from raising interest rates in the near future.

After reporting no change in consumer prices over the past few months, the Labor Department released a report showing a modest increase in consumer prices in the month of February.

The Labor Department said its consumer price index rose by 0.2 percent in February after coming in unchanged for three straight months. The uptick in consumer prices matched economist estimates.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in February after rising by 0.2 percent in January. Economists had expected another 0.2 percent increase in prices.

The report also said the annual rate of consume price growth slowed to 1.5 percent in February from 1.6 percent in November, while the annual rate of core consumer price growth edged down to 2.1 percent from 2.2 percent.

With consumer price growth slowing, Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The Fed would appear to be justified in supporting the real economy by being patient and leaving interest rates on hold for a potentially extended period."

Sector News

Oil service stocks continue to see substantial strength in mid-day trading, with the Philadelphia Oil Service Index surging up by 2.7 percent.

The rally by oil service stocks comes amid a continued increase by the price of crude oil, as crude for April delivery is climbing $0.51 to $57.50 a barrel.

Significant strength also remains visible among gold stocks, which are moving higher along with the price of the precious metal.

With gold for April delivery rising $7 to $1,298.10 an ounce, the NYSE Arca Gold Bugs Index is up by 1.5 percent.

Natural gas, steel, and tobacco stocks are also seeing notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index spiked by 1.8 percent, while Hong Kong's Hang Seng Index surged up by 1.5 percent.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index is down by 0.2 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In the bond market, treasuries have moved modestly higher over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.3 basis points at 2.630 percent.

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