Stocks Close Modestly Lower Following Lackluster Trading Day - U.S. Commentary

(RTTNews) - Stocks saw modest weakness throughout much of the trading day on Tuesday, partly offsetting the strength seen in the two previous sessions. Selling pressure was relatively subdued, however, limiting the downside for the markets.

The major averages pulled back going into the close, ending the day moderately lower. The Dow dipped 52.40 points or 0.3 percent to 15,973.13, the Nasdaq edged down 8.26 points or 0.2 percent to 4,060.49 and the S&P 500 slipped 5.75 points or 0.3 percent to 1,802.62.

The modest weakness on Wall Street was partly due to profit taking after the S&P 500 ended the previous session at a new record closing high. The Nasdaq also reached its best levels since 2000.

Negative sentiment was also generated by a report showing that Chinese industrial production rose by slightly less than expected in November.

The report from the National Bureau of Statistics showed that Chinese industrial production rose 10 percent year-over-year in November, reflecting a slowdown from the 10.3 percent growth seen in October and coming in below estimates for a 10.1 percent increase.

Meanwhile, traders largely shrugged off a report from the Commerce Department showing that U.S. wholesale inventories rose by much more than expected in the month of October.

The report said wholesale inventories jumped 1.4 percent in October following an upwardly revised 0.5 percent increase in September. Economists had been expecting inventories to increase by 0.4 percent.

The Commerce Department said wholesales sales also increased by 1.0 percent in October after rising by an upwardly revised 0.8 percent in September.

Among individual stocks, auto parts retailer Pep Boys (PBY) fell sharply after reporting third quarter results that came in below analyst estimates. Shares of Pep Boys tumbled 7.6 percent to a nearly two-month closing low.

Shares of Analogic (ALOG) also came under pressure after the airport security and medical imaging company reported weaker than expected first quarter results.

Auto giant General Motors (GM) saw more modest weakness after naming product development chief Mary Barra as its next chief executive officer. Barra will succeed Dan Akerson, who will step down as chairman and CEO on January 15th.

On the other hand, shares of Rambus (RMBS) moved sharply higher after the company signed a broad patent cross license agreement with Micron (MU). Under the deal, Rambus will receive up to $10 million per quarter in royalty payments over the next seven years.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the relatively lackluster close by the broader markets.

Software stocks saw considerable weakness, however, with the Dow Jones Software Index falling by 1.2 percent. The pullback by the index came after it ended the previous session at its best levels since 2000.

Industry giants Oracle (ORCL) and Microsoft (MSFT) turned in two of the software sector's worst performances, sliding by 2.3 percent and 1.6 percent, respectively.

Utilities, networking, and electronic storage stocks also moved to the downside on the day, although selling pressure was somewhat subdued.

Meanwhile, gold stocks moved sharply higher on the day, benefiting from a substantial increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved back to the downside during trading on Tuesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day down by 0.3 percent.

The major European markets also moved lower on the day. While the U.K.'s FTSE 100 Index fell by 0.6 percent, the German DAX Index and French CAC 40 Index dropped by 0.9 percent and 1 percent, respectively.

In the bond market, treasuries moved notably higher, climbing further off their recent lows. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6 basis points to 2.797 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Wednesday could be impacted by the results of the Treasury Department's auction of $21 billion worth of ten-year notes.