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

August 20, 2014



WASHINGTON (Alliance News) - Stocks are turning in a lackluster performance in early trading on Wednesday after moving sharply higher over the past few sessions. The major averages moved lower at the start of trading but have been lingering near the unchanged line since then.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 5.90 points or 0.1% at 4,521.62, the Dow is up 15.22 points or 0.1% at 16,934.81 and the S&P 500 is up 0.69 points or less than a tenth of a % at 1,982.29.

The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting this afternoon.

Traders are likely to closely analyze the minutes for clues as to how soon the Fed will begin to consider raising interest rates.

Most of the major sectors are showing only modest moves in early trading, contributing to the lack of direction being shown by broader markets.

While some early weakness is visible among tobacco and oil service stocks, railroad stocks are moving to the upside.

Traders may be taking a break following the upward move seen over the past two weeks, which lifted the tech-heavy Nasdaq to its best levels in over fourteen years.

Among individual stocks, shares of Target (TGT) came under pressure at the start of trading but have shown a substantial turnaround since then.

The rebound by Target comes even though the troubled retailer reported weaker than expected second quarter earnings and cut its full-year profit guidance.

Home improvement retailer Lowe's (LOW) also fell sharply at the open after lowering its forecast for full-year sales growth, but the stock has shown a significant recovery since then.

On the other hand, shares of Hertz (HTZ) remain firmly in the red after an initial sell-off. The pullback came after the rental car company said it expects to be well below the low end of its 2014 guidance due to operational challenges.

In overseas trading, most stock markets across the Asia-Pacific region moved modestly higher during trading on Wednesday. Japan'sNikkei 225 Index closed just above the unchanged line, while Hong Kong'sHang Seng Index edged up by 0.2%.

Meanwhile, the major European markets are giving back some ground following recent strength. While the UK'sFTSE 100 Index has fallen by 0.6%, the German DAX Index and the French CAC 40 Index are down by 0.7% and 0.8%, respectively.

In the bond market, treasuries have moved modestly lower, pulling back further off their recent highs. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 2.421%.



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Source: Alliance News


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