Choppy Trading Persists Ahead Of Fed Announcement - U.S. Commentary

(RTTNews) - With traders reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement, stocks have shown a lack of direction throughout much of the trading day on Wednesday. A mixed batch of economic data is also contributing to the choppy trading.

Currently, the major averages are turning in a mixed performance, with the tech-heavy Nasdaq posting a modest loss. The Nasdaq is down 8.27 points or 0.2 percent at 4,095.27, while the Dow is up 14.48 points or 0.1 percent at 16,549.85 and the S&P 500 is up 0.69 points or less than 0.1 percent at 1,879.02.

The lackluster performance on Wall Street comes as many traders are staying on the sidelines ahead of the Fed's announcement at about 2 pm ET.

While the Fed is widely expected to announce another $10 billion reduction in the pace of its asset purchases, traders are likely to pay close attention to any changes to the language of the accompanying statement.

Stocks typically see considerable volatility in the aftermath of the announcement from the Fed as traders weigh its impact on the outlook for the markets.

Traders are also digesting a mixed batch of U.S. economic data, including an upbeat report on private sector employment and much weaker than expected first quarter GDP data.

Before the start of trading, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of April.

ADP said private sector employment surged up by 220,000 jobs in April compared to economist estimates for an increase of about 210,000 jobs.

However, the Commerce Department released a separate report showing only a modest uptick in U.S. economic activity in the first quarter.

The report said GDP inched up by just 0.1 percent in the first quarter of 2014 compared to the 2.6 percent growth seen in the fourth quarter of 2013.

While the severe winter weather had been expected to contribute to a notable slowdown in the pace of GDP growth, economists had still been calling for an increase of about 1.2 percent.

A separate report from MNI Indicators showed that Chicago-area business activity grew at a much faster than expected rate in the month of April.

Among individual stocks, shares of DreamWorks Animation (DWA) have fallen sharply after the studio reported a steep first quarter loss due to a weak box office performance by "Mr. Peabody & Sherman."

Social media giant Twitter (TWTR) is also under pressure after reporting reported better than expected first quarter results but providing disappointing guidance.

On the other hand, shares of Pepco (PEP) have surged higher after the electric service provider agreed to be acquired by rival Exelon (EXC) for approximately $6.8 billion.

Sector News

Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

While weakness among computer hardware and internet stocks is weighing on the tech-heavy Nasdaq, some strength is visible among trucking stocks.

C.H. Robinson (CHRW) is leading the trucking sector higher, with the third party logistics company surging up by 6.5 percent after reporting better than expected first quarter earnings.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.

The major European markets also ended the day on opposite sides of the unchanged line. While the French CAC 40 Index dipped by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index both crept up by 0.2 percent.

In the bond market, treasuries have moved moderately higher ahead of the Fed's monetary policy announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.1 basis points at 2.664 percent.