Stocks moved to the upside early in the trading day on Tuesday but failed to sustain the advance and showed a lack of direction over the course of the session. The major averages spent much of the day lingering near the unchanged line.

The major averages eventually ended the session modestly lower. The Dow dipped 81.52 points or 0.2 percent to 34,312.46, the Nasdaq edged down 4.00 points or less than a tenth of a percent to 13,657.17 and the S&P 500 slipped 8.92 points or 0.2 percent to 4,188.13

The early strength on Wall Street came amid a continued pullback by treasury yields, with the yield on the benchmark ten-year note falling below 1.6 percent.

The drop in yields partly reflects easing worries about inflation and the possibility the Federal Reserve could begin tapering its asset purchases.

While yields remained lower throughout the day, traders may have been reluctant to continue buying stocks ahead of the release of a reading on inflation said to be preferred by the Fed on Friday.

On the U.S. economic front, the Commerce Department released a report showing a substantial decrease in new home sales in the month of April.

The report said new home sales slumped by 5.9 percent to an annual rate of 863,000 in April after jumping by 7.4 percent to a significantly downwardly revised rate of 917,000 in March.

Economists had expected new home sales to tumble by 7.0 percent to a rate of 950,000 from the 1.021 million originally reported for the previous month.

A separate report released by the Conference Board showed consumer confidence in the U.S. held steady in the month of May.

The Conference Board said its consumer confidence index edged down to 117.2 in May after climbing to a revised 117.5 in April.

Economists had expected the consumer confidence index to pull back to 119.5 from the 121.7 originally reported for the previous month.

Sector News

Despite the lackluster performance by the broader markets, steel stocks showed a significant move to the downside on the day, dragging the NYSE Arca Steel Index down by 2.4 percent to its lowest closing level in almost a month.

Energy stocks also saw considerable weakness even though the price of crude oil for July delivery inched up $0.02 to $66.07 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index tumbled by 2.3 percent, while the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index both slumped by 2 percent.

Tobacco, financial and utilities stocks also moved notably lower over the course of the session, contributing to the pullback by the major averages.

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 0.7 percent, while China’s Shanghai Composite Index soared by 2.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged up by 0.2 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both fell by 0.3 percent.

In the bond market, treasuries extended the upward trend seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.4 basis points to 1.564 percent.

Looking Ahead

A lack of major U.S. economic data may lead to another choppy trading day on Wednesday, as traders continue to look ahead to Friday’s closely watched inflation data.

For comments and feedback contact:

Business News

Source link