(RTTNews) - Stocks have shown a lack of direction over the course of morning trading on Tuesday following the strong upward move seen in the previous session. The major averages have spent the morning bouncing back and forth across the unchanged line.
Currently, the major averages are posting modest gains. The Dow is up 33.97 points or 0.1 percent at 26,698.37, the Nasdaq is up 6.98 points or 0.1 percent at 10,909.77 and the S&P 500 is up 2.26 points or 0.1 percent at 3,296.87.
Profit taking contributed to early weakness on Wall Street, although selling pressure waned shortly after the start of trading.
Traders seem reluctant to make significant moves amid some uncertainty about the near-term outlook for the markets after the tech-heavy Nasdaq reached a new record closing high on Monday. The S&P 500 also finished Monday's trading at its best closing level since February.
Uncertainty about the prospects for a new coronavirus relief bill may also be keeping traders on the sidelines, as negotiators struggle to reach an agreement even as new cases continue to spike and enhanced unemployment benefits expired last week.
Democrats and Trump administration officials said they made progress towards a deal during a meeting on Monday, but House Speaker Nancy Pelosi, D-Calif., noted the two sides "still have our differences."
The amount of the federal unemployment benefit remains a key sticking point, as Republicans want to slash the benefit to $200 per week and Democrats want to keep the benefit at $600 per week.
A disagreement over funding for state and local governments is also holding up a deal, with President Donald Trump accusing Democrats of seeking to bail out poorly run Democratic-run states and cities.
On the U.S. economic front, the Commerce Department released a report showing another substantial increase in new orders for manufactured goods in the month of June.
The Commerce Department said factory orders soared by 6.2 percent in June after skyrocketing by a revised 7.7 percent in May.
Economists had expected factory orders to jump by 5.0 percent compared to the 8.0 percent spike originally reported for the previous month.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Airline stocks have shown a substantial move to the upside, however, with the NYSE Arca Airline Index surging up by 2.6 percent. The index ended the previous session at its lowest closing level in two months.
Natural gas and gold stocks are also seeing considerable strength, moving higher along with the prices of their associated commodities.
On the other hand, biotechnology stocks are giving back ground following yesterday's rally, dragging the NYSE Arca Biotechnology Index down by 1.2 percent. Software stocks are also partly offsetting Monday's strong gains.
In overseas trading, most stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.7 percent, while Hong Kong's Hang Seng Index spiked by 2 percent.
Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has risen by 0.3 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.4 percent.
In the bond market, treasuries are showing a notable rebound following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.6 basis points at 0.517 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.