Nasdaq Modestly Higher In Mid-Day Trading But Dow Firmly In The Red

After ending the previous session on opposite sides of the unchanged line, the major U.S. stock indexes are turning in another mixed performance during trading on Tuesday. The Dow and the S&P 500 have turned negative after seeing initial strength, while the Nasdaq is posting a modest gain.

The tech-heavy Nasdaq briefly joined the other major averages in the red in morning trading but is currently up 31.35 points or 0.2 percent at 15,136.93. Meanwhile, the Dow is down 186.95 points or 0.5 percent at 34,682.68 and the S&P 500 is down 6.86 points or 0.2 percent at 4,461.87.

While the uptick by the Nasdaq comes after the index closed lower for the fourth straight session on Monday, the Dow and the S&P 500 have pulled back after snapping a five-day losing streak in the previous session.

Stocks initially benefited from a positive reaction to a highly anticipated Labor Department report showing consumer prices increased by slightly less than expected in the month of August.

The Labor Department said its consumer price index rose by 0.3 percent in August after climbing by 0.5 percent in July. Economists had expected consumer prices to increase by 0.4 percent.

Excluding food and energy prices, core consumer prices inched up by just 0.1 percent in August after rising by 0.3 percent in July. Economists had been expecting another 0.3 percent increase.

The report also showed a slowdown in the annual rate of consumer price growth, which dipped to 5.3 percent in August from 5.4 percent in July.

The annual rate of core consumer price growth also slowed to 4.0 percent in August from 4.3 percent in the previous month.

The relatively tame inflation data initially generated optimism that the Federal Reserve may delay plans to begin scaling back stimulus.

However, subsequent comments from economists have suggested that the Fed is still likely to begin tapering its asset purchases as soon as December.

The Fed is scheduled to hold a monetary policy meeting next week, with many expecting the central bank to provide an update on the outlook for its asset purchase program.

Banking stocks have shown a significant move to the downside over the course of the session, dragging the KBW Bank Index down by 1.7 percent.

Considerable weakness also remains visible among steel stocks, as reflected by the 1.3 percent drop by the NYSE Arca Steel Index.

Oil service stocks have also come under pressure as the day has progressed, with the Philadelphia Oil Service Index falling by 1.2 percent. The weakness in the sector comes despite a modest increase by the price of crude oil.

Airline, natural gas and tobacco stocks are also seeing notable weakness on the day, while gold stocks have moved higher along with the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while China’s Shanghai Composite Index tumbled by 1.4 percent.

The major European markets also ended the day mixed. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index fell by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries have shown a strong move to the upside following the consumer price inflation data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.5 basis points at 1.279 percent.

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