News Column

Stocks Turning In A Lackluster Performance In Early Trading - US Commentary

June 9, 2014

WASHINGTON (Alliance News) - With traders reluctant to make any significant moves, stocks are showing a lack of direction in early trading on Monday. The major averages are lingering near the unchanged line after closing firmly positive in the two previous sessions.

Currently, the major averages are posting modest gains. The Dow is up 21.76 points or 0.1% at 16,946.04, the Nasdaq is up 2.47 points or 0.1% at 4,323.87 and the S&P 500 is up 1.71 points or 0.1% at 1,951.15.

The choppy trading on Wall Street comes as traders are sitting on the sidelines after last week's rally lifted the Dow and the S&P 500 to new record closing highs. The tech-heavy Nasdaq also reached its best levels in over two months.

While recent economic data suggests that the US economy has recovered from the winter doldrums, traders have expressed some uncertainty about whether the pace of growth supports further upside for the markets.

A lack of major US economic data on the day is also contributing to the lackluster performance, although key reports on retail sales, producer prices, and consumer sentiment are due to be released later in the week.

Nonetheless, some positive sentiment may have been generated by upbeat economic data from Japan and China.

A report from Japan'sCabinet Office showed that the nation's GDP rose 1.6% in the first quarter, faster than the 1.5% growth estimated initially.

Additionally, China'sGeneral Administration of Customs said the Chinese trade surplus widened to USD35.9 billion in May amid a 7% year-over-year jump in exports.

Most of the major sectors are showing only modest moves, however, although some strength has emerged among housing and banking stocks.

Among individual stocks, shares of Idenix Pharmaceuticals (IDIX) have shown a substantial move to the upside after the biopharmaceutical company agreed to be acquired by drug giant Merck (MRK) for approximately USD3.85 billion.

Hittite Microwave (HITT) is also moving sharply higher after the chipmaker agreed to be acquired by Analog Devices (ADI) for USD78 per share in cash.

On the other hand, shares of Tyson Foods (TSN) have moved to the downside amid reports that the meat producer has won the battle to acquire Hillshire Brands (HSH) for about USD63 per share in cash.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan'sNikkei 225 Index rose by 0.3%, while Hong Kong'sHang Seng Index advanced by 0.7%.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index has edged down by 0.1%, the UK'sFTSE 100 Index and the German DAX Index are down by 0.2% and 0.1%, respectively.

In the bond market, treasuries are seeing modest weakness, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 2.62%.

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Source: Alliance News

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