Following the strong upward move seen over the course of the previous week, stocks are showing a lack of direction in morning trading on Monday. The major averages have spent the morning bouncing back and forth across the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 20.31 points or 0.1 percent at 14,857.31, the Dow is down 83.11 points or 0.2 percent at 34,978.44 and the S&P 500 is down 3.44 points or 0.1 percent at 4,408.35.
The choppy trading on Wall Street comes as traders take a breather after a four-day winning streak lifted the major averages to new record closing highs last Friday.
The rally represented a remarkable turnaround for the markets following the sell-off last Monday, which dragged the major averages down to their lowest closing levels in almost a month.
Upbeat earnings news contributed to rebound along with continued optimism about the economy despite some concerns about the spread of new coronavirus variants.
Traders also may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed is expected to leave interest rates unchanged, but traders will be paying close attention to any comments regarding the central bank’s asset purchase program.
Traders are also likely to keep an eye on some key U.S. economic data, including reports on durable goods orders, consumer confidence, second quarter GDP and personal income and spending.
Earnings news may also continue to attract attention this week, with Tesla (TSLA), General Electric (GE), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), Boeing (BA), McDonald’s (MCD), Pfizer (PFE), Amazon (AMZN), and Exxon Mobil (XOM) among a slew of companies due to report their quarterly results.
Most of the major sectors are showing only modest on the day, contributing to the lackluster performance by the broader markets.
Oil service stocks have shown a substantial move to the upside, however, with the Philadelphia Oil Service Index spiking by 2.9 percent.
The rally by oil service stocks comes despite a modest decrease by the price of crude oil, as crude for August delivery is edging down $0.07 to $71.99 a barrel.
Airline stocks are also turning in a strong performance on the day, resulting in a 1.8 percent advance by the NYSE Arca Airline Index.
Steel, oil producer and natural gas stocks are also seeing notable strength, while housing stocks have moved to the downside.
The weakness in the housing sector comes after the Commerce Department released a report showing new home sales unexpectedly tumbled to their lowest level in over a year in June.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, although Japan’s Nikkei 225 Index bucked the downtrend and jumped by 1 percent. China’s Shanghai Composite Index tumbled by 2.3 percent, while Hong Kong’s Hang Seng Index plunged by 4.1 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index is just below the unchanged line, the U.K.’s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.3 percent.
In the bond markets, treasuries are regaining ground after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2 basis points at 1.266 percent.
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