Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction over the course of the trading day after trending higher over the past several sessions. Despite the lackluster performance, the Dow and the S&P 500 still reached new record closing highs.

The major averages eventually ended the session on opposite sides of the unchanged line. While the Nasdaq dipped 17.09 points or 0.3 percent to 5,005.73, the Dow crept up 24.45 points or 0.1 percent to 18,372.12 and the S&P 500 inched up 0.29 points or less than a tenth of a percent to 2,152.43.

The choppy trading on Wall Street came as traders took a breather following the recent run up to record highs by the Dow and the S&P 500.

Traders may also have been reluctant to make significant moves ahead of the release of a slew of U.S. economic data over the coming days, including reports on retail sales, industrial production, and producer and consumer prices.

Financial giants JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) are also due to release their quarterly results later this week as the earnings season starts to pick up steam.

On the U.S. economic front, the Labor Department released a report this morning showing that import prices rose less than expected in the month of June.

The report said import prices edged up by 0.2 percent in June after surging up by 1.4 percent in May. Economists had expected import prices to rise by 0.5 percent.

The Labor Department also said export prices climbed by 0.8 percent in June following a 1.2 percent jump in the previous month. Export prices had been expected to increase by 0.3 percent.

Late in the trading day, the Federal Reserve released its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

The Fed said reports from the districts indicate that economic activity continued to expand at a modest pace across most regions from mid-May through the end of June.

Sector News

Most of the major sectors ended the day showing only modest moves, although energy stocks saw considerable weakness amid a steep drop by the price of crude oil. Crude oil for August delivery tumbled $2.05 to $44.75 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index slumped by 2.4 percent, the NYSE Arca Natural Gas Index dropped by 1.3 percent and the NYSE Arca Oil & Gas Index fell by 1.1 percent.

Biotechnology stocks also showed a significant move to the downside, dragging the NYSE Arca Biotechnology Index down by 1.9 percent. The index turned lower after reaching its best intraday level in a month in early trading.

On the other hand, substantial strength was visible among gold stocks, as reflected by the 3 percent jump by the NYSE Arca Gold Bugs Index. The strength in the sector came as gold for August delivery climbed $8.30 to $1,343.60 an ounce.

Notable strength also emerged among railroad stocks, with CSX Corp. (CSX) leading the way higher after reporting better than expected second quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index dipped by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries moved back to the upside following the pullback seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.5 basis points to 1.468 percent.

Looking Ahead

Trading on Thursday may be impacted by reports on weekly jobless claims and producer prices as well as speeches by a number of Fed officials.

On the earnings front, JPMorgan and Delta Air Lines (DAL) are among the companies due to report their quarterly results before the start of trading on Thursday.