Lackluster Trading Day Results In Mixed Close On Wall Street - U.S. Commentary

(RTTNews) - After turning lower over the course of the previous session, stocks turned in a relatively lackluster performance during trading on Tuesday. The major averages bounced back and forth across the unchanged line before eventually ending the session mixed.

While weakness among some tech stocks dragged the Nasdaq down by 10.96 points or 0.2 percent to 4,977.29, the Dow and the S&P 500 closed modestly higher. The Dow rose 59.66 points or 0.3 percent to 18,036.70 and the S&P 500 edged up 3.41 points or 0.2 percent to 2,095.84.

The choppy trading on Wall Street came following the release of closely watched reports on U.S. retail sales and producer price inflation.

The Commerce Department released a report before the start of trading showing that retail sales rebounded in March following three straight monthly declines, although the increase fell short of economist estimates.

While the report said retail sales climbed by 0.9 percent in March following a revised 0.5 percent decrease in February, economists had been expecting sales to surge up by 1.1 percent.

Chris Low, chief economist at FTN Financial, said, "Normally, a 0.9% retail sales increase in a month can be described as strong, but not this time, because the rise failed to reverse even half of the prior three months' weakness."

Meanwhile, the Labor Department released a separate report showing that producer prices rose for the first time in five months in March.

The Labor Department said its producer price index for final demand rose by 0.2 percent in March after falling by 0.5 percent in February. The increase in prices matched economist estimates.

Core producer prices, which exclude food and energy prices, also rose by 0.2 percent in March following a 0.5 percent drop in the previous month. Economists had expected core prices to tick up by 0.1 percent.

Traders were also digesting earnings news from some big-name companies, including JP Morgan (JPM), Wells Fargo (WFC), and Johnson & Johnson (JNJ).

While all three companies reported better than expected first quarter results, Johnson & Johnson lowered its full-year guidance due to the impact of the stronger dollar.

Sector News

Despite the lackluster performance turned in by the broader markets, steel stocks showed a substantial move to the upside on the day. Reflecting the strength in the sector, the NYSE Arca Steel Index surged up by 3 percent.

The strength among steel stocks was partly attributed to a report showing that Brazilian iron ore exports rose to a three-month high in March.

Significant strength was also visible among energy stocks, which moved higher along with the price of crude oil. Crude for May delivery jumped $1.38 to $53.29 a barrel on the day.

Within the energy sector, oil service stocks posted particularly strong gains, driving the Philadelphia Oil Service Index up by 2.3 percent to a three-month closing high. Networking, trucking and gold stocks also saw notable strength on the day, while weakness was visible among semiconductor and railroad stocks.

Norfolk Southern (NSC) helped to lead the railroad sector lower, tumbling by 4.1 percent after warning of weaker than expected first quarter earnings.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Tuesday's trading mixed, with Japan's Nikkei 225 Index closing nearly flat for the second straight day. Hong Kong's Hang Seng Index tumbled by 1.6 percent, while China's Shanghai Composite Index rose by 0.3 percent.

The major European markets also turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index and the German DAX Index fell by 0.7 percent and 0.9 percent, respectively.

In the bond market, treasuries gave back ground after an early rally but still closed in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 3.5 basis points to 1.904 percent.

Looking Ahead

Trading on Wednesday may be impacted by a number of different catalysts, including the European Central Bank's monetary policy meeting.

U.S. economic data may also attract some attention, with traders likely to keep an eye on reports on industrial production, homebuilder confidence and New York manufacturing as well as the Federal Reserve's Beige Book.

On the earnings front, Intel (INTC) is releasing its first quarter results after the close of today's trading, while Bank of America (BAC), Charles Schwab (SCHW), and Delta Air Lines (DAL) are among the companies due to release their results before the start of trading on Wednesday.