Major Averages Turning In Mixed Performance In Mid-Day Trading

Stocks continue to turn in a relatively lackluster performance in mid-day trading on Wednesday after showing a lack of direction early in the session. 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 Dow is down 14.34 points or 0.1 percent at 30,673.14, the Nasdaq is up 57.48 points or 0.4 percent at 13,670.25 and the S&P 500 is up 11.18 points or 0.3 percent at 3,837.49.

A positive reaction to the latest earnings news contributed to initial strength on Wall Street, with Google parent Alphabet (GOOGL) helping to lead the way higher.

Shares of Alphabet are currently up by 8.1 percent after the tech giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, online retail giant Amazon has turned lower over the course of the session despite reporting better than expected fourth quarter results.

Amazon also announced CEO Jeff Bezos will transition to the role of Executive Chair in the third quarter of 2021, with Amazon Web Services chief Andy Jassy set to become CEO at that time.

A notable decline by shares of Amgen (AMGN) is weighing on the Dow after the biotechnology company reported fourth quarter results that beat estimates but provided disappointing guidance.

The lackluster performance by the broader markets also comes following the release of some upbeat economic data, which has raised concerns lawmakers will feel less pressure to provide additional stimulus.

Before the start of trading, payroll processor ADP released a report showing a much stronger than expected rebound in private sector employment in the month of January.

ADP said private sector employment jumped by 174,000 jobs in January after decreasing by a revised 78,000 jobs in December.

Economists had expected employment to rise by 49,000 jobs compared to the loss of 123,000 jobs originally reported for the previous month.

“Based on these numbers, our estimate that the officials figures will show non-farm payroll employment unchanged last month, data due Friday, now looks a little pessimistic,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, “If non-farm payrolls did rally last month, that could complicate the push in Congress for another large-scale fiscal stimulus.”

A separate report released by the Institute for Supply Management showed U.S. service sector activity unexpectedly grew at an accelerated rate in the month of January.

The ISM said its services PMI inched up to 58.7 in January from a revised 57.7 in December, with a reading above 50 indicating growth in the service sector.

The uptick came as surprise to economists, who had expected the index to edge down to 56.8 from the 57.2 originally reported for the previous month.

With the unexpected monthly increase, the services PMI reached its highest level since hitting 58.8 in February of 2019.

Sector News

Energy stocks continue to see considerable strength in mid-day trading, benefiting from another sharp increase by the price of crude oil. Crude for March delivery is currently jumping $1.40 to $56.16 a barrel.

Reflecting the strength in the energy sector, the NYSE Arca Oil Index and the Philadelphia Oil Service Index are spiking by 3.5 percent and 3.1 percent, respectively.

Substantial strength also remains visible among airline stocks, with the NYSE Arca Airline Index soaring by 2.9 percent.

On the other hand, semiconductor stocks have shown a notable move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.5 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 1 percent, while Australia’s S&P/ASX 200 Index climbed by 0.9 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.7 percent, the French CAC 40 Index ended the day nearly unchanged and the U.K.’s FTSE 100 Index edged down by 0.1 percent.

In the bond market, treasuries are extending the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.2 basis points at 1.127 percent.