U.S. Stocks Climb Well Off Worst Levels But Remain Modestly Lower
(RTTNews) - After coming under pressure early in the session, stocks have regained some ground over the course of the trading day on Tuesday. The major averages have climbed well off their worst levels, with the Dow briefly peeking above the unchanged line.
Currently, the major averages are posting modest losses. The Dow is down 2.88 points or less than a tenth of a percent at 26,832.63, the Nasdaq is down 19.36 points or 0.2 percent at 8,068.07 and the S&P 500 is down 6.56 points or 0.2 percent at 2,971.87.
The early weakness on Wall Street partly reflected uncertainty ahead of the European Central Bank's monetary policy decision on Thursday as well as next week's Federal Reserve meeting.
Both the ECB and the Fed are expected to cut interest rates in reaction to recent indications of a slowdown by the global economy.
With the major averages back within striking distance of record highs, traders may be questioning whether stocks will see further upside in an economy that requires support from global central banks to avoid recession.
Selling pressure remained somewhat subdued, however, with some traders sticking to the sidelines amid another quiet day on the U.S. economic front.
The weaker than expected jobs data released last Friday raised concerns about the economic outlook but also reinforced expectations of another interest rate cut by the Fed next week.
Reports on producer and consumer price inflation, retail sales, and consumer sentiment are likely to attract attention in the coming days.
Stocks showed a notable recovery attempt after a report from the South China Morning Post said China is expected to agree to buy more American agricultural products in hopes of a better trade deal.
A source familiar with the situation told the SCMP working-level officials are discussing the text of a deal that would be reviewed at the high-level meeting scheduled for next month.
However, Scott Kennedy, senior adviser with the Washington-based Centre for Strategic and International Studies, warned that a deal on soybeans won't dispel distrust between Beijing and Washington.
Despite the recovery attempt by the broader markets, notable weakness remains visible among commercial real estate stocks, with the Dow Jones U.S. Real Estate Index down by 1.1 percent.
Significant weakness has also emerged among software stocks, as reflected by the 1.2 percent drop by the Dow Jones U.S. Software Index.
On the other hand, steel stocks have also shown a substantial move to the upside on the day, driving the NYSE Arca Steel Index up by 2.6 percent.
Energy stocks also continue to see some strength despite a pullback by the price of crude oil. Crude for October delivery is slipping $0.11 to $57.74 a barrel after reaching a high of $58.76 a barrel.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index slipped by 0.1 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index inched up by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index both climbed by 0.4 percent.
In the bond market, treasuries are extending the notable downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.2 basis points at 1.694 percent.
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