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Major Averages Finish Choppy Trading Day Modestly Lower - U.S. Commentary

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Following the notable advance seen in the previous session, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

At the close of trading, the major averages were modestly lower. The Dow fell 59.34 points or 0.2 percent to 26,597.05 points, the Nasdaq slipped 18.81 points or 0.2 percent to 8,102.01 and the S&P 500 dipped 6.43 points or 0.2 percent to 2,927.25.

Traders seemed reluctant to make significant moves amid uncertainty about the near-term outlook for the markets after yesterday's advance lifted the Nasdaq and the S&P 500 to record closing highs.

A mixed batch of earnings news from big-name companies such as Boeing (BA), Caterpillar (CAT) and AT&T (T) also contributed to the choppy trading on Wall Street.

Shares of Boeing closed modestly higher after the aerospace giant reported first quarter earnings that matched analyst estimates but pulled its full-year guidance due to uncertainty surrounding the grounding of its 737 MAX aircraft.

Heavy equipment maker Caterpillar reported first quarter results that exceeded analyst estimates on both the top and bottom lines but moved notably lower on the day.

Shares of AT&T also saw significant weakness after the telecom giant reported first quarter earnings that met estimates but weaker than expected revenues.

A light day on the U.S. economic front also kept traders on the sidelines ahead of the release of reports on weekly jobless claims, durable goods orders and first quarter GDP in the coming days.

Sector News

Most of the major sectors ended the day showing only modest moves, although significant weakness was visible among oil service stocks.

The Philadelphia Oil Service Index plunged by 3.5 percent after ending the previous session at its best closing level in over four months.

The pullback by oil service stocks comes as the price of crude oil for June delivery fell $0.41 to $65.89 a barrel following the release of a report showing a bigger than expected weekly increase in crude oil inventories.

Steel stocks also moved sharply lower over the course of the trading session, dragging the NYSE Arca Steel Index down by 2.3 percent. The index tumbled to its lowest closing level in a month.

Computer hardware, oil producer, and biotechnology stocks also saw notable weakness on the day, while some strength was visible among semiconductor and transportation stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

The major European markets also ended the day mixed. While the German DAX Index advanced by 0.6 percent, the French CAC 40 Index dipped by 0.3 percent and the U.K.'s FTSE 100 Index dropped by 0.7 percent.

In the bond market, treasuries extended the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.8 basis points to 2.522 percent.

Looking Ahead

Earnings news is likely to remain in focus on Thursday, with Facebook (FB), Microsoft (MSFT), Tesla (TSLA), and Visa (V) among the companies releasing their quarterly results after the close of today's trading.

3M (MMM), Bristol-Myers (BMY), Comcast (CMCSA), Hershey (HSY), and UPS (UPS) are also among the companies due to report their results before the start of trading on Thursday.

Traders are also likely to keep an eye on a pair of U.S. economic reports on weekly jobless claims and durable goods orders.

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