Major Averages Little Changed After Recovering From Initial Weakness
Stocks recovered from an early move to the downside on Tuesday and have turned in a relatively lackluster performance throughout the session since then. The choppy trading comes on the heels of the pullback seen in the previous session.
Currently, the major averages are narrowly mixed. While the Nasdaq is up 16.29 points or 0.1 percent at 14,201.78, the S&P 500 is down 5.47 points or 0.1 percent at 4,564.31 and the Dow is down 83.26 points or 0.2 percent at 36,121.18.
The initial weakness on Wall Street came as traders continued to cash in on recent strength in the markets amid concerns optimism about the outlook for interest rates have led to overbought conditions.
While the Federal Reserve is widely expected to leave interest rates unchanged in the coming months, traders may need more evidence to solidify hopes of a rate cut in the near future.
The subsequent rebound came as a Labor Department report may have reinforced those hopes, showing a bigger than expected decrease in U.S. job openings in the month of October.
The report said job openings slid to 8.73 million in October from 9.35 million in September, falling to the lowest level since March 2021. Economists had expected job openings to edge down to 9.30 million.
Meanwhile, a separate report released by the Institute for Supply Management showed service sector activity in the U.S. grew at a slightly faster rate in the month of November.
The ISM said its services PMI crept up to 52.7 in November from 51.8 in October, with a reading above 50 indicating growth. Economists had expected the index to inch up to 52.0.
On Friday, the Labor Department is scheduled to release its closely watched monthly jobs report, which could have a significant impact on the outlook for interest rates.
Economists currently expect employment to increase by 185,000 jobs in November after rising by 150,000 jobs in October, while the unemployment rate is expected to hold at 3.9 percent.
Oil service stocks have come under pressure over the course of the session, dragging the Philadelphia Oil Service Index down by 1.9 percent. The index is on pace to end the day at a five-month closing low.
The weakness among oil service stocks comes amid a decrease by the price of crude oil, with crude for January delivery falling $0.71 to $72.33 a barrel.
A modest decrease by the price of gold also continues to weigh on gold stocks, as reflected by the 1.8 percent loss being posted by the NYSE Arca Gold Bugs Index.
Airline, networking and natural gas stocks are also seeing notable weakness on the day, while most of the other major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.4 percent, while China’s Shanghai Composite Index tumbled by 1.7 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 and the German DAX Index advanced by 0.7 percent and 0.8 percent, respectively.
In the bond market, treasuries have shown a strong move back to the upside after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.0 basis points at 4.178 percent.
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