News Column

Stocks Turn Mixed After Seeing Initial Upward Move - US Commentary

September 3, 2014

WASHINGTON (Alliance News) - After failing to sustain an initial upward move, stocks have turned mixed over the course of early trading on Wednesday. The major averages have pulled back off their highs for the young session, with the tech-heavy Nasdaq sliding into negative territory.

Currently, the major averages remain on opposite sides of the unchanged line. While the Nasdaq is down 3.01 points or 0.1% at 4,595.18, the Dow is up 63.88 points or 0.4% at 17,131.44 and the S&P 500 is up 4.02 points or 0.2% at 2,006.30.

The initial strength on Wall Street was partly due to easing geopolitical concerns amid news of a possible ceasefire in Ukraine.

Ukrainian President Petro Poroshenko released a statement indicating that a phone conversation with Russian President Vladimir Putin resulted in an agreement on a "ceasefire process" for the eastern part of the country.

Poroshenko toned down an earlier statement announcing a "permanent ceasefire" agreement following denials from the Kremlin.

The Kremlin noted that Putin and Poroshenko expressed largely similar views on possible ways to end the crisis but argued that Putin could not agree to a ceasefire because Russia is not party to the conflict.

Early buying interest was also generated by upbeat economic news out of China, with a report showing that Chinese service sector activity grew at a faster rate in August.

Nonetheless, traders seemed somewhat reluctant to continue buying stocks ahead of the European Central Bank's monetary policy announcement on Thursday and the release of the monthly US jobs report on Friday.

Despite the subsequent pullback by the broader markets, notable strength remains visible among steel stocks. The NYSE Arca Steel Index is up by 1.6%, with the strength in the sector coming on the heels of news that Morgan Stanley raised its view of the steel industry to Attractive.

Utilities and railroad stocks also continue to see some strength on the day, while weakness has emerged among airline and housing stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan'sNikkei 225 Index rose by 0.4%, while Hong Kong'sHang Seng Index surged up by 2.3%.

The major European markets have also shown notable moves to the upside on the day. While the German DAX Index has jumped by 1.2%, the French CAC 40 Index and the UK'sFTSE 100 Index are up by 0.9% and 0.8%, respectively.

In the bond market, treasuries are seeing modest weakness, extending yesterday's notable downward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 2.435%.

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Source: Alliance News

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