After showing a lack of direction early in the session, stocks continue to turn in a lackluster performance in afternoon trading on Wednesday. The major averages have spent the day bouncing back and forth across the unchanged line.
Currently, the major averages are narrowly mixed. While the Nasdaq is down 15.62 points or 0.1 percent at 10,999.27, the S&P 500 is up 3.34 points or 0.1 percent at 3,944.60 and the Dow is up 69.21 points or 0.2 percent at 33,665.55.
The choppy trading on Wall Street comes as traders express uncertainty about the near-term outlook for the markets ahead of next week’s Federal Reserve meeting.
The Fed still seems poised to slow the pace of interest rate hikes, but recent upbeat economic data has raised concerns about how much further the central bank will raise rates at future meetings.
Traders are likely to pay close attention to the Fed’s accompanying statement, although a lot of key data will be released before the next meeting in late January/early February.
The recent selling on Wall Street partly reflects worries the Fed will be need to push the economy into a prolonged recession in order to bring inflation down close to its 2 percent target.
The negative sentiment was partly offset by a report from the Labor Department showing unit labor costs jumped by much less than previously estimated in the third quarter.
The report showed the surge in unit labor costs in the third quarter was downwardly revised to 2.4 percent from 3.5 percent. The jump in unit labor costs was expected to be downwardly revised to 3.2 percent.
The downward revision to unit labor cost growth reflected an upward revision to labor productivity as well as a downward revision to the spike in hourly compensation.
The data may have helped offset recent inflation concerns, although traders continue to look ahead to Friday’s report on producer price inflation in November.
The University of Michigan is also due to release its preliminary report on consumer sentiment in the month of December on Friday. The report includes readings on inflation expectations that could impact the outlook for interest rates.
Sector News
Reflecting the lackluster performance by the broader markets, most of the major sectors continue to show only modest moves in afternoon trading.
Airline stocks continue to see significant weakness, however, dragging the NYSE Arca Airline Index down by 2.2 percent.
Considerable weakness has also emerged among oil service stocks, as reflected by the 1.7 percent drop by the Philadelphia Oil Service Index.
The weakness in the oil service sector comes as the price of crude oil is extending a recent sell-off, with crude for January delivery slumping $1.70 to $72.55 a barrel.
On the other hand, housing stocks continue to see substantial strength on the day, driving the Philadelphia Housing Sector Index up by 12.5percent.
Gold stocks also continue to turn in a strong performance amid an increase by the price of the precious metal, resulting in a 1.3 percent gain by the NYSE Arca Gold Bugs.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index plummeted by 3.2 percent.
The major European markets also moved to the downside on the day. While the German DAX Index fell by 0.6 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both dipped by 0.4 percent.
In the bond market, treasuries have moved to the upside, extending the rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.1 basis points at 3.442 percent.
Business News
Major Averages Narrowly Mixed Amid Choppy Trading
2022-12-07 18:22:29
