Stocks showed a strong move to the upside at the start of trading on Tuesday but have given back some ground over the course of the morning. The major averages have pulled back well off their highs of the session, with the tech-heavy Nasdaq dipping into negative territory.
Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 28.09 points or 0.2 percent at 13,720.64, the Dow is up 117.41 points or 0.3 percent at 34,646.86 and the S&P 500 is up 3.56 points or 0.1 percent at 4,207.67.
The initial strength on Wall Street came as upbeat manufacturing data from overseas added to optimism about the outlook for the global economy.
Data showed Chinese manufacturing activity expanded at a faster pace in the month of May, while Eurozone manufacturing activity expanded at a record pace in May despite supple bottlenecks.
The Institute for Supply Management also released a report showing manufacturing activity in the U.S. expanded at a slightly faster pace in May.
The ISM said its manufacturing PMI inched up to 61.2 in May from 60.7 in April, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to come in unchanged.
Buying interest waned shortly after the start of trading, however, as traders continue to express uncertainty about inflation and the outlook for monetary policy.
Traders may also have been reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists currently expect employment to jump by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9 percent from 6.1 percent.
Despite the pullback by the broader markets, energy stocks continue to see substantial strength amid a sharp increase by the price of crude oil.
Crude oil for July delivery is spiking $2.34 to $68.66 a barrel after OPEC and its allies agreed to stick to a plan to gradually increase production.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.1 percent, the NYSE Arca Oil Index is up by 3.8 percent and the NYSE Arca Natural Gas Index is up by 3.7 percent.
Significant strength also remains visible among steel stocks, as reflected by the 2.5 percent jump by the NYSE Arca Steel Index.
Tobacco, airline and computer hardware stocks are also seeing notable strength, while weakness has emerged among pharmaceutical stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index is up by 0.9 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both up by 1.1 percent.
In the bond market, treasuries have come under pressure following the upbeat manufacturing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.6 basis points at 1.637 percent.
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