U.S. Stocks Showing A Lack Of Direction Amid Uncertainty About Rate Outlook

Stocks have shown a lack of direction over the course of morning trading on Tuesday, with the major averages bouncing back and forth across the unchanged line. The choppy trading comes after the major averages ended Monday’s trading modestly higher but well off their best levels.

Currently, the Nasdaq is down 14.04 points or 0.1 percent at 11,452.94 and the S&P 500 is down 8.93 points or 0.2 percent at 3,973.31. The narrower Dow has shown a somewhat more notable decline, falling 196.71 points or 0.6 percent to 32,692.38.

The lackluster performance on Wall Street comes as traders seem reluctant to make more significant moves amid ongoing concerns about the outlook for interest rates.

In the coming days, traders are likely to keep an eye on reports on weekly jobless claims and manufacturing and service sector activity.

The data could shed additional light on the strength of the economy and provide further clues about how much the Federal Reserve is likely to raise interest rates.

In U.S. economic news, MNI Indicators released a report showing Chicago-area business activity unexpectedly contracted at a slightly faster rate in the month of February.

MNI Indicators said its Chicago business barometer edged down to 43.6 in February from 44.3 in January, with a reading below 50 indicating a contraction. Economists had expected the Chicago business barometer to inch up to 45.0.

A separate report released by the Conference Board showed U.S. consumer confidence unexpectedly decreased for the second consecutive month in February.

The Conference Board said its consumer confidence index slid to 102.9 in February from a downwardly revised 106.0 in January.

The continued decrease surprised economists, who had expected the consumer confidence index to inch up to 108.5 from the 107.1 originally reported for the previous month.

“The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board.

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

While tobacco and pharmaceutical stocks have moved to the downside, steel stocks are extending the rebound seen in the previous session.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index advanced by 0.7 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the French CAC 40 Index is down by 0.2 percent and the U.K.’s FTSE 100 Index is down by 0.8 percent.

In the bond market, treasuries have climbed off their worst levels but remain in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 3.951 percent.

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