Stocks Close Mostly Lower After Another Lackluster Session - U.S. Commentary

(RTTNews) - After ending the previous session roughly flat, stocks turned in another lackluster performance during trading on Tuesday before closing mostly lower. Traders remained reluctant to make any significant moves amid another quiet day on the U.S. economic front.

The major averages ended the session mixed, with the Nasdaq closing just above the unchanged line. While the Nasdaq inched up 0.13 points or less than a tenth of a percent to 3,919.92, the Dow edged down 32.43 points or 0.2 percent to 15,750.67 and the S&P 500 slipped 4.20 points or 0.2 percent to 1,767.69.

The choppy trading on Wall Street came as traders stuck to the sidelines amid uncertainty about the outlook for the Federal Reserve's stimulus program.

Comments from a pair of Federal Reserve officials added to the questions about the timing of the Fed's plans to begin scaling back its asset purchases.

Atlanta Fed President Dennis Lockhart told Bloomberg News the Fed's decision to begin tapering "could very well take place" at its meeting next month.

However, Lockhart also noted that he would like to see inflation move toward the central bank's 2 percent target before tapering begins.

Minneapolis Fed President Narayana Kocherlakota expressed support for maintaining the stimulus program in separate remarks, arguing that tapering too soon would be a drag on the economy.

Kocherlakota said the timing of the conversation about tapering was "puzzling" and claimed the Fed should do "whatever it takes" to achieve its goals.

Traders also continued to look ahead to the release of some key economic data later in the week, including reports on the U.S. trade balance, weekly jobless claims and industrial production.

The Senate Banking Committee's hearing on Janet Yellen's nomination to be the next Fed Chairman is also likely to be in focus on Thursday.

On the earnings front, traders are also awaiting the release of quarterly results from big-name companies such as Cisco (CSCO), Wal-Mart (WMT), Applied Materials (AMAT) and Tyco (TYC).

Sector News

Many of the major sectors ended the day showing only modest moves, although considerable weakness was visible among gold stocks. The NYSE Arca Gold Bugs Index fell by 2.3 percent to its lowest closing level in almost a month.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery sliding $9.90 to $1,271.20 an ounce.

Steel stocks also came under pressure on the day, dragging the NYSE Arca Steel Index down by 1.8 percent. A sharp drop by the price of crude oil also weighed on the oil service sector.

Meanwhile, significant strength emerged among networking stocks, as reflected by the 1 percent gain posted by the NYSE Arca Networking Index. Emulex (ELX) helped lead the sector higher after announcing that its board has approved a $200 million share repurchase program.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets all ended the day on the downside. While the French CAC 40 Index dropped by 0.6 percent, German DAX Index dipped by 0.3 percent and the U.K.'s FTSE 100 Index closed just below the unchanged line

In the bond market, treasuries moved modestly lower, extending the sharp drop seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.7 basis points to 2.768 percent.

Looking Ahead

Wednesday represents another quiet day on the U.S. economic front, potentially resulting in another lackluster trading session.