News Column

Stocks Turning In Lackluster Performance In Early Trading - US Commentary

May 13, 2014

WASHINGTON (Alliance News) - After moving sharply higher over the course of the previous session, stocks are turning in a lackluster performance in early trading on Tuesday. The major averages are showing only modest moves, lingering near the unchanged line.

Currently, the major averages are posting modest gains on the day. The Dow is up 29.67 points or 0.2% at 16,725.14, the Nasdaq is up 2.36 points or 0.1% at 4,146.22 and the S&P 500 is up 2.33 points or 0.1% at 1,898.98.

The choppy trading on Wall Street comes as traders are expressing some uncertainty about the near-term outlook for the markets after yesterday's gains lifted the Dow and the S&P 500 to new record closing highs.

Traders are also digesting a report from the Commerce Department showing weaker than expected retail sales growth in the month of April.

The report said retail sales edged up by 0.1% in April after surging up by an upwardly revised 1.5% in March.

Economists had expected sales to rise by about 0.4% compared to the 1.1% growth originally reported for the previous month.

Excluding an increase in sales by motor vehicle and parts dealers, retail sales came in unchanged in April compared to a 1.0% increase in March. Ex-auto sales had been expected to climb by 0.6%.

Peter Boockvar, managing director at the Lindsey Group, said, "While sales in April were weaker than expected, the March upward revision helped to cushion most of the drop specifically at the 'control group' which gets plugged into GDP."

"The March upward revision will help Q1 GDP estimates but will be more than offset by a reduction to Q2," Boockvar added.

Most of the major sectors are showing only modest moves in early trading, although considerable strength has emerged among housing stocks. The Philadelphia Housing Sector Index has advanced by 1.3%, reaching its best intraday level in over a month.

Railroad and software stocks are also seeing some early strength, while early weakness is visible among tobacco stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2%, while Hong Kong'sHang Seng Index rose by 0.4%.

The major European markets are seeing modest strength on the day. While the German DAX Index has risen by 0.4%, the French CAC 40 Index is up by 0.2% and the UK'sFTSE 100 Index is just above the unchanged line.

In the bond market, treasuries have shown a strong move to the upside on the heels of the retail sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4 basis points at 2.618%.

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Source: Alliance News

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