U.S. Stocks Continue To Experience Choppy Trading
Stocks continue to turn in a relatively lackluster performance in mid-day trading on Tuesday, with the major averages showing only modest moves after recovering from an early sell-off over the course of the previous session.
Currently, the major averages are on opposite sides of the unchanged line. While the Nasdaq is up 17.75 points or 0.1 percent at 12,760.26, the Dow is down 132.54 points or 0.4 percent at 30,083.91 and the S&P 500 is down 7.79 points or 0.2 percent at 3,687.13.
The choppy trading on Wall Street comes as traders seem reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the recent run to record highs.
Reports about a new coronavirus strain have generated some negative sentiment, although news of the approval of a new stimulus bill has helped prop up the markets.
The $900 billion relief package includes federal assistance for the unemployed, small businesses and healthcare providers as well as $600 in direct payments to individuals.
The relief package was attached to a $1.4 trillion government spending bill that funds the government through September 30th. The bill is expected to be signed by President Donald Trump in the coming days.
The upcoming holidays may also be contributing to light trading activity, but some traders are likely to stick around for a slew of U.S. economic data on Wednesday.
On the U.S. economic front, the Commerce Department released revised data showing the U.S. economy grew by slightly more than previously estimated in the third quarter of 2020.
The report showed the spike in gross domestic product in the third quarter was upwardly revised to 33.4 percent from the previously reported 33.1 percent. Economists had expected the jump in GDP to be unrevised.
The Commerce Department said the unexpected upward revision primarily reflected larger increases in consumer spending and non-residential fixed investment.
Meanwhile, the National Association of Realtors released a separate report showing existing home sales pulled back in the month of November.
NAR said existing home sales tumbled by 2.5 percent to an annual rate of 6.69 million in November after jumping by 4.4 percent to a revised rate of 6.86 million in October.
Economists had expected existing home sales to slump by 2.2 percent to a rate of 6.70 million from the 6.85 million originally reported for the previous month.
The Conference Board also released a report showing consumer confidence in the U.S. has unexpectedly decrease in the month of December, with the report also showing a substantial downward revision to the reading on consumer confidence in November.
The Conference Board said its consumer confidence index slid to 88.6 in December from a downwardly revised 92.9 in November.
Economists had expected the consumer confidence index to inch up to 97.0 from the 96.1 originally reported for the previous month.
Most of the major sectors continue to show only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.
Gold stocks have shown a substantial move to the downside, however, with the NYSE Arca Gold Bugs Index tumbling by 2.9 percent.
The weakness among gold stocks comes amid a decrease by the price of the precious metal, as gold for February delivery is sliding $12.70 to $1,870.10 an ounce.
Significant weakness is also visible among airline stocks, resulting in a 2 percent drop by the NYSE Arca Airline Index. The index is on pace to end the session at its lowest closing level in a month.
Steel stocks are also seeing considerable weakness in mid-day trading, with the NYSE Arca Steel Index down by 1.6 percent.
On the other hand, networking stocks have moved to the upside on the day, driving the NYSE Arca Networking Index up by 1.1 percent to a nearly twenty-year intraday high.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1 percent, while China’s Shanghai Composite Index plunged by 1.9 percent.
Meanwhile, the major European markets moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0.6 percent, the German DAX Index and the French CAC 40 Index surged up by 1.3 percent and 1.4 percent, respectively.
In the bond market, treasuries are seeing modest strength after ending the previous session nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 0.923 percent.
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