News Column

Stocks Experiencing Choppy Trading Following Recent Gains - US Commentary

June 23, 2014

WASHINGTON (Alliance News) - With traders seemingly reluctant to make any significant moves, stocks have shown a lack of direction in early trading on Monday. The major averages have been bouncing back and forth across the unchanged line after moving notably higher last week.

Currently, the major averages are posting slim losses on the day. The Dow is down 25.31 points or 0.2% at 16,921.77, the Nasdaq is down 2.40 points or 0.1% at 4,365.64 and the S&P 500 is down 0.25 points or less than a tenth of a % at 1,962.62.

The choppy trading on Wall Street partly reflects uncertainty about the near-term outlook for the markets after last week's gains lifted the Dow and the S&P 500 to record closing highs. The tech-heavy Nasdaq also reached its best closing level since 2000.

Meanwhile, traders have largely shrugged off the release of a report from the National Association of Realtors showing a bigger than expected increase in existing home sales in the month of May.

NAR said existing home sales jumped 4.9% to a seasonally adjusted annual rate of 4.89 million in May from an upwardly revised 4.66 million in April.

Economists had expected existing home sales to climb to an annual rate of 4.75 million from the 4.65 million originally reported for the previous month.

With the bigger than expected increase, existing home sales rose to their highest annual rate since last October, although they remain down by 5.0% compared to the same month a year ago.

Several other key reports are scheduled to be released later in the week, including data on new home sales, durable goods orders and personal income and spending.

The personal income and spending report includes a reading on inflation that is favored by the Federal Reserve and is likely to be in focus in light of recent reports showing notable price growth.

Most of the major sectors are showing only modest moves in early trading, contributing to the lackluster performance by the broader markets.

Gold stocks are seeing considerable strength, however, with the NYSE Arca Gold Bugs up by 1.3%. The strength in the sector comes despite a modest decrease by the price of gold.

Steel and housing stocks have also moved to the upside, while weakness has emerged among airline and tobacco stocks.

In overseas trading, stock markets across the Asia-Pacific region once again turned in a mixed performance on Monday. Japan'sNikkei 225 Index inched up by 0.1%, while Hong Kong's Hang Seng tumbled by 1.7%.

Meanwhile, the major European markets have all moved to the downside on the day. The UK'sFTSE 100 Index, the French CAC 40 Index and the German DAX Index are all down by 0.3%.

In the bond market, treasuries have moved moderately higher despite the upbeat existing home sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 2.597%.

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Source: Alliance News

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