News Column

Stocks Turning In Another Mixed Performance In Mid-Day Trading - US Commentary

September 3, 2014



WASHINGTON (Alliance News) - Stocks are turning in another mixed performance in mid-day trading on Wednesday after failing to sustain an early upward move. While the Dow has managed to remain in positive territory, the tech-heavy Nasdaq has slid firmly into the red.

The Nasdaq has recently climbed off its worst levels of the day but remains down 19.08 points or 0.4% at 4,579.11. On the other hand, the Dow is up 41.13 points or 0.2% at 17,108.69 and the S&P 500 is up 0.67 points or less than a tenth of a % at 2,002.95.

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 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.

A notable decline by shares of Apple (AAPL) has weighed on the markets since then, with the tech giant tumbling by 3.5%.

The steep drop comes after Apple ended the previous session at a record closing high and partly reflects concerns that the iPhone 6 will fail to live up to expectations.

In US economic news, the Commerce Department released a report showing a sharp jump in factory orders in the month of July, with orders for transportation equipment showing a substantial increase.

The report said factory orders soared by 10.5% in July after climbing by an upwardly revised 1.5% in June.

The surge in factory orders reflected the biggest monthly increase on record but still fell short of the 10.9% jump expected by economists.

Sector News

After seeing considerable strength in the previous session, airline stocks have shown a notable move back to the downside. The NYSE Arca Airline Index has fallen by 1.3% after ending the previous session at a twelve-year closing high.

Delta Air Lines (DAL) and American Airlines (AAL) are turning in two of the sector's worst performances, falling by 5.1% and 4.3%, respectively.

Housing stocks have also come under pressure on the day, dragging the Philadelphia Housing Sector Index down by 1.3%. Toll Brothers (TOL) is leading the sector lower despite reporting stronger than expected third quarter earnings growth.

On the other hand, considerable strength remains visible among steel stocks, with the NYSE Arca Steel Index up by 1.4%. The strength in the sector comes on the heels of news that Morgan Stanley raised its view of the steel industry to Attractive.

Most of the other major sectors are showing only modest moves, contributing to the relatively lackluster performance by the broader markets.

Other Markets

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 also showed notable moves to the upside on the day. While the UK'sFTSE 100 Index advanced by 0.7%, the French CAC 40 Index and the German DAX Index jumped by 1% and 1.3%, respectively.

In the bond market, treasuries have regained some ground from early in the session but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 2.43%.



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Source: Alliance News


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