News Column

Stocks Turning In Another Lackluster Performance - US Commentary

June 3, 2014

WASHINGTON (Alliance News) - After ending the previous session mixed, stocks are turning in another lackluster performance in early trading on Tuesday. The major averages initially moved to the downside, but selling pressure has waned since the open.

Currently, the major averages are turning in a mixed performance. While the Nasdaq has inched up 1.26 points or less than a tenth of a % to 4,238.45, the Dow is down 24.34 points or 0.2% at 16,719.29 and the S&P 500 is down 1.51 points or 0.1% at 1,923.46.

The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves ahead of the European Central Bank meeting on Thursday and the release of the closely watched monthly US jobs report on Friday.

While profit taking helped to pull stocks lower at the start of trading, the major averages pared their losses following the release of a report showing a bigger than expected increase in US factory orders.

The Commerce Department said factory orders increased by 0.7% in April after jumping by an upwardly revised 1.5% in March. Economists had expected orders to climb by about 0.5%.

Most of the major sectors are currently showing only modest move, although notable weakness is visible among gold stocks. The NYSE Arca Gold Bugs Index is down by 1.1%, with the weakness in the sector coming amid a modest decrease by the price of gold.

Railroad and software stocks are also seeing some weakness in early trading, while strength has emerged among semiconductor stocks.

Among individual stocks, shares of Quiksilver (ZQK) are seeing substantial weakness in early trading after the sports apparel and footwear retailer reported a much wider than expected second quarter loss on a bigger than expected drop in sales.

Doughnut maker Krispy Kreme (KKD) has also come under pressure after the company reported first quarter earnings in line with estimates but cut its full-year earnings guidance.

On the other hand, shares of Hillshire Brands (HSH) are seeing early strength on news that Pilgrim's Pride (PPC) has raised its offer to acquire the meat producer to USD55 per share.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan'sNikkei 225 Index and Hong Kong'sHang Seng Index advanced by 0.7% and 0.9%, respectively, while Australia's All Ordinaries Index dropped by 0.7%.

Meanwhile, the major European markets have all moved to the downside on the day. While the UK'sFTSE 100 Index has fallen by 0.5%, the German DAX Index and French CAC 40 Index are down by 0.2% and 0.1%, respectively.

In the bond market, treasuries are moving moderately higher, pulling back further off their recent highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.6 basis points at 2.57%.

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Source: Alliance News

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