WASHINGTON (Alliance News) - After coming under pressure early in the trading session on Tuesday, stocks continue to see moderate weakness in mid-day trading. Selling pressure has remained somewhat subdued, but the markets have maintained a negative bias.
Currently, the major averages are firmly in negative territory but off their worst levels of the day. The Dow is down 61.38 points or 0.4% at 16,507.90, the Nasdaq is down 11.74 points or 0.3% at 4,372.15 and the S&P 500 is down 7.89 points or 0.4% at 1,931.10.
The weakness on Wall Street partly reflects concerns about the outlook for monetary policy following the release of some upbeat US economic data.
The Institute for Supply Management released a report showing that its non-manufacturing index climbed to 58.7 in July from 56.0 in June, with a reading above 50 indicating growth in the service sector. Economists had been expecting the index to edge up to a reading of 56.5.
With the bigger than expected increase, the ISM said the non-manufacturing index reached its highest reading since the revised survey's inception in January of 2008.
A separate report from the Commerce Department showed that factory orders rebounded by more than expected in the month of June.
While the data points to an upbeat economic outlook, it has also added to speculation that the Federal Reserve may raise interest rates sooner than anticipated.
Peter Boockvar, chief market analyst at the Lindsey Group, said, "Encouragingly, the Q2 economic rebound after the Q1 contraction is continuing at a good pace in Q3."
"While of course something to root for, it again brings the policy of the Federal Reserve front and center and that is why good economic news is not translating into better stock market performance," he added.
Negative sentiment has also been generated by news that Target (TGT) lowered its second quarter earnings guidance, with the retail giant falling by 2.9% on the day.
Target attributed the lower guidance to expenses related to last year's data breach as well as promotional markdowns at its US stores and softer than expected sales in Canada.
After turning in some of the best performances in the previous session, energy stocks have shown a significant move back to the downside.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index have fallen by 1.5% and 1.3%, respectively.
The pullback by energy stocks comes amid a notable decrease by the price of crude oil, with crude for September delivery falling USD0.80 to USD97.49 a barrel.
Gold stocks have also moved to the downside along with the price of the precious metal, although selling pressure has remained relatively subdued.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 1%, while Hong Kong's Hang Seng Index crept up by 0.2%.
Meanwhile, the major European markets all moved to the upside on the day. While the UK's FTSE 100 Index inched up by 0.1%, the German DAX Index and the French CAC 40 Index both rose by 0.4%.
In the bond market, treasuries are seeing modest weakness on the heels of the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 2.516%.
Original headline: Stocks Remain Mostly Negative In Mid-Day Trading - US Commentary
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