Stocks Pull Back Off Best Levels But Close Modestly Higher - U.S. Commentary

(RTTNews) - Stocks moved mostly higher in morning trading on Tuesday but gave back some ground late in the session. The major averages pulled back well off their best levels of the day but managed to close in positive territory.

The tech-heavy Nasdaq reached a record intraday high during the session but pulled back to close up just 11.11 points or 0.2 percent at 5,379.92. The Dow inched up 23.70 points or 0.1 percent to 19,121.70, and the S&P 500 crept up 2.94 points or 0.1 percent to 2,204.66.

The late-day pullback by stocks was partly due to uncertainty ahead of the highly anticipated OPEC meeting on Wednesday.

Crude oil prices saw continued volatility ahead of the meeting, with crude for January delivery plunging $1.85 to $45.23 a barrel after jumping $1.02 to $47.07 a barrel on Monday.

The drop by the price of crude oil came amid concerns that OPEC members will be unable to finalize an agreement on cutting production.

Adding to the concerns, a report from Reuters said Iran and Iraq are resisting pressure from Saudi Arabia to curtail oil output.

Earlier in the day, positive sentiment was generated by the release of some upbeat economic data, including a report from the Commerce Department showing a bigger than expected upward revision to the pace of GDP growth in the third quarter.

The report said GDP climbed by 3.2 percent in the third quarter compared to the initially estimated 2.9 percent increase. Economists had expected the pace of growth to be upwardly revised to 3.0 percent.

The upwardly revised GDP growth in the third quarter compares to the 1.4 percent increase seen in the second quarter and marks the strongest growth in two years.

A separate report from the Conference Board showed a much bigger than expected improvement in consumer confidence in the month of November.

The Conference Board said its consumer confidence index surged up to 107.1 in October from an upwardly revised 100.8 in October. Economists had been expecting the index to climb to 101.0.

With the bigger than expected increase, the consumer confidence index reached its highest level since hitting 111.9 in July of 2007.

Sector News

Most of the major sectors ended the day showing only modest moves, although considerable weakness was visible among steel stocks. The NYSE Arca Steel Index slumped by 2.8 percent after ending the previous session at a two-year closing high.

A.M. Castle (CAS), Mechel (MTL), and Cliffs Natural Resources (CLF) turned in some of the steel sector's worst performances.

Energy stocks also saw considerable weakness amid the steep drop by the price of crude oil. The Philadelphia Oil Service Index tumbled by 2 percent, while the NYSE Arca Oil & Gas Index slid by 1.4 percent.

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 fell by 0.3 percent, while China's Shanghai Composite Index edged up by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the German DAX Index rose by 0.4 percent and the French CAC 40 Index advanced by 0.9 percent.

In the bond market, treasuries moved modestly higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 2.302 percent.

Looking Ahead

While trading on Wednesday may be impacted by any news out of the OPEC meeting, traders are also likely to keep an eye on reports on private sector employment, personal income and spending, and pending home sales.

The Federal Reserve is also scheduled to release its Beige Book, which could shed some additional light on the outlook for interest rates.