Stocks Finish Choppy Trading Day Roughly Flat - U.S. Commentary

(RTTNews) - After ending the previous session mostly higher, stocks showed a lack of direction throughout the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before ending the session roughly flat.

While the Dow inched up 15.38 points or 0.1 percent to a new record closing high of 18,224.57, the Nasdaq edged down 0.98 points or less than a tenth of a percent to 4,967.14 and the S&P 500 dipped 1.62 points or 0.1 percent to 2,113.86.

The choppy trading on Wall Street came as traders seemed reluctant to make any significant moves following the upward trend seen over the past several weeks.

Traders also stayed on the sidelines as Federal Reserve Chair Janet Yellen delivered her second day of testimony on Capitol Hill.

Yellen's prepared remarks were identical to those she delivered yesterday, with the Fed chief reiterating that the central bank is not likely to begin raising interest rates for at least the next couple monetary policy meetings.

In the question-and-answer portion of her testimony, Yellen said inflation is likely to move lower before it goes higher and noted that inflation will be one of the key factors driving monetary policy.

On the economic front, the Commerce Department released a report showing that U.S. new home sales came in well above economist estimates in the month of January.

The report said new home sales dipped by just 0.2 percent to an annual rate of 481,000 in January from the revised December rate of 482,000.

While new home sales pulled back off the more than six-year high set in the previous month, the rate still far exceeded economist estimates of 470,000.

Sector News

Many of the major sectors ended the day showing only modest moves, although substantial weakness was visible among airline stocks. The NYSE Arca Airline Index plunged by 3 percent after ending the previous session at its best closing level in almost a month.

Republic Airways (RJET) posted a particularly steep loss, plummeting by 14.5 percent after reporting its fourth quarter results.

Computer hardware stocks also showed a significant move to the downside, dragging the NYSE Arca Computer Hardware Index down by 2.2 percent. Hewlett-Packard (HPQ) led the sector lower, tumbling by 9.9 percent after providing disappointing guidance.

While utilities stocks also came under pressure on the day, considerable strength was visible among gold stocks. Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index surged up by 1.8 percent.

The gains by gold stocks came amid an increase by the price of the precious metal, with gold for April delivery climbing $4.20 to $1,201.50 an ounce.

Networking, biotechnology, and telecom stocks also saw notable strength, offsetting the weakness seen in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Hong Kong's Hang Seng Index inched up by 0.1 percent, while Japan's Nikkei 225 Index edged down by 0.1 percent.

The major European also ended the day on opposite sides of the unchanged line. While the German DAX Index ticked up by less than a tenth of a percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index dipped by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries moved modestly higher, extending the upward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.9 basis points to 1.969 percent.

Looking Ahead

Economic data may be in focus on Thursday, with traders likely to keep an eye on reports on consumer prices, durable goods orders, and weekly jobless claims.