U.S. Stocks Finish Choppy Trading Day Narrowly Mixed

After failing to sustain an early move to the upside, stocks showed a lack of direction over the course of the trading session on Tuesday. The major averages swung back and forth across the unchanged line before eventually closing narrowly mixed.

While the tech-heavy Nasdaq dipped 43.71 points or 0.2 percent to 19,044.39, the S&P 500 inched up 6.69 points or 0.1 percent to 5,842.91 and the Dow climbed 221.16 points or 0.5 percent to 42,518.28.

The initial strength on Wall Street came following the release of a Labor Department report showing producer prices rose by slightly less than expected in the month of December.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in December after climbing by 0.4 percent in November. Economists had expected producer prices to rise by 0.3 percent.

Meanwhile, the report said the annual rate of producer price growth accelerated to 3.3 percent in December from 3.0 percent in November. The acceleration matched economist estimates.

The smaller than expected monthly increase by producer prices helped ease recent concerns about the outlook for inflation and interest rates, although the faster annual growth kept buying interest somewhat subdued.

Traders may also have been reluctant to make more significant moves ahead of the release of a more closely watched report on consumer price inflation on Wednesday.

Economists currently expect consumer prices to rise by 0.3 percent in December, matching the increase seen in November. The annual rate of growth is expected to accelerate to 2.9 percent from 2.7 percent.

Sector News

Gold stocks moved sharply higher on the day, resulting in a 2.8 percent spike by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid a modest increase by the price of the precious metal.

Substantial strength was also visible among housing stocks, as reflected by the 2.7 percent surge by the Philadelphia Housing Sector Index.

Airline stocks also showed a significant move to the upside, driving the NYSE Arca Airline Index up by 2.4 percent.

Networking, natural gas and banking stocks also saw notable strength, while pharmaceutical stocks showed a considerable move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. China’s Shanghai Composite Index surged by 2.5 percent and Hong Kong’s Hang Seng Index jumped by 1.8 percent, although Japan’s Nikkei 225 Index bucked the uptrend and slumped by 1.8 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.3 percent, the French CAC 40 Index edged down by 0.2 percent and the German DAX Index climbed by 0.7 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.5 basis points to 4.788 percent.

Looking Ahead

The report on consumer price inflation is likely to be in the spotlight on Wednesday as traders look for more clarity about the outlook for interest rates.

Business News