News Column

Stocks Showing A Lack Of Direction In Early Trading - US Commentary

April 30, 2014

WASHINGTON (Alliance News) - After moving mostly higher over the course of the previous session, stocks are turning in a lackluster performance in early trading on Wednesday. While the Nasdaq initially came under pressure, the major averages are currently all showing only modest moves.

The major averages are turning in a mixed performance. The Dow is up 9.68 points or 0.1% at 16,545.05, while the Nasdaq is down 8.23 point or 0.2% at 4,095.31 and the S&P 500 is down 0.43 points or less than a tenth of a % at 1,877.90.

The choppy trading on Wall Street comes as traders are largely staying on the sidelines ahead of the Federal Reserve's monetary policy announcement this afternoon.

The Fed is widely expected to announce another USD10 billion reduction in the pace of its asset purchase, with traders likely to pay close attention to any changes to the language of the accompanying statement.

Traders are also digesting a mixed batch of US economic data, including an upbeat report on private sector employment and much weaker than expected first quarter GDP data.

Before the start of trading, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of April.

ADP said private sector employment surged up by 220,000 jobs in April compared to economist estimates for an increase of about 210,000 jobs.

The report also showed notable upward revisions to the job growth in the two previous months, with private sector employment jumping by 209,000 jobs in March and 193,000 jobs in February.

However, any positive sentiment generated by the jobs data was offset by the release of a separate report from the Commerce Department showing only a modest uptick in GDP in the first quarter.

The Commerce Department said GDP inched up by just 0.1% in the first quarter of 2014 compared to the 2.6% growth seen in the fourth quarter of 2013.

While the severe winter weather had been expected to contribute to a notable slowdown in the pace of GDP growth, economists had still been calling for an increase of about 1.2%.

Most of the major sectors are showing only modest moves in early trading, although gold stocks have come under pressure amid a decrease by the price of the precious metal. With gold for June delivery USD8.40 to USD1,287.90 an ounce, the NYSE Arca Gold Bugs Index is down by 1.1%.

Natural gas and internet stocks are also seeing some early weakness, while strength is visible among trucking stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged up by 0.1%, while Hong Kong'sHang Seng Index tumbled by 1.4%.

The major European markets have also turned mixed on the day. While the French CAC 40 Index has dropped by 0.5%, the UK'sFTSE 100 Index and the German DAX Index have both inched up by 0.1%.

In the bond market, treasuries are seeing modest strength ahead of the monetary policy announcement from the Fed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 2.679%.

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Source: Alliance News