U.S. Stocks Lack Direction As Data Adds To Interest Rate Uncertainty

Following the lackluster performance seen in the previous session, stocks continue to show a lack of direction during trading on Thursday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 9.94 points or 0.1 percent at 16,187.71, the Dow is down 61.97 points or 0.2 percent at 38,981.35 and the S&P 500 is down 9.14 points or 0.2 percent at 5,156.17.

The choppy trading on Wall Street comes as traders digest a batch of key U.S. economic data that has led to some uncertainty about the outlook for interest rates.

While the Labor Department released a report showing producer prices increased by much more than expected in the month of February, the Commerce Department released a separate report showing retail sales rebounded by less than expected during the month.

The Labor Department said its producer price index for final demand climbed by 0.6 percent in February after rising by 0.3 percent in January. Economists had expected producer prices to rise by another 0.3 percent.

The report also said the annual rate of producer price growth accelerated to 1.6 percent in February from a revised 1.0 percent in January.

Economists had expected the year-over-year price growth to rise to 1.1 percent from the 0.9 percent originally reported for the previous month.

Meanwhile, the Commerce Department released a report showing retail sales rebounded in the month of February, although the increase fell short of economist estimates.

The Commerce Department said retail sales climbed by 0.6 percent in February after slumping by a revised 1.1 percent in January.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.8 percent decrease originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales rose by 0.3 percent in February after falling by 0.8 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

Sector News

Housing stocks have shown a substantial move to the downside on the day, dragging the Philadelphia Housing Sector Index down by 2.4 percent.

Interest rate-sensitive telecom and commercial real estate stocks have also come under pressure, with the NYSE Arca North American Telecom Index and the Dow Jones U.S. Real Estate Index down by 1.8 percent and 1.7 percent, respectively.

Considerable weakness is also visible among biotechnology stocks, as reflected by the 1.6 percent loss being posted by the NYSE Arca Biotechnology Index.

Transportation, steel and gold stocks are also seeing notable weakness, while software stocks have shown a strong move to the upside.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. While Japan’s Nikkei 225 Index rose by 0.3 percent, China’s Shanghai Composite Index dipped by 0.2 percent and Hong Kong’s Hang Seng Index slid by 0.7 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.3 percent, the German DAX Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.6 percent.

In the bond market, treasuries have moved sharply lower in reaction to the producer price inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9.6 basis points at 4.288 percent.

Business News