Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - Stocks turned in a mixed performance during trading on Tuesday following the rally seen in the previous session. While the Nasdaq hovered in positive territory throughout the session, the Dow and the S&P 500 both spent much of the day in the red.

The tech-heavy Nasdaq ended the day up 19.50 points or 0.4 percent at 5,014.10, climbing back near the fifteen-year highs set a month ago. Meanwhile, the Dow slid 85.34 points or 0.5 percent to 17,949.59, and the S&P 500 fell 3.11 points or 0.2 percent to 2,097.29.

The choppy trading on Wall Street may partly have reflected uncertainty about the near-term outlook for the markets following the volatility seen over the past few days.

A lack of major U.S. economic data may also have kept some traders on the sidelines ahead of next week's Federal Reserve meeting.

The economic calendar will pick up in the comings days with the release of reports on weekly jobless claims, durable goods orders, and new and existing home sales.

Nonetheless, traders may remain reluctant to make any significant moves ahead of the Fed's monetary policy announcement next Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders will pay close attention to any indications regarding the possibility of a rate hike in June.

Traders were also digesting the latest batch of earnings news, as big-name companies like IBM (IBM), DuPont (DD), and Verizon (VZ) reported their quarterly results.

Among individual stocks, shares of Mylan (MYL) moved sharply higher on the day amid news Teva Pharmaceutical (TEVA) offered to acquire the drug maker for $82 per share.

Chip equipment maker Lam Research (LRCX) also turned in a strong performance after reporting better than expected quarterly results.

On the other hand, shares of Sanmina (SANM) came under pressure after the contract electronics maker reported quarterly results that missed estimates and provided disappointing guidance.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster performance by the broader markets.

Oil service stocks saw substantial weakness, however, with the Philadelphia Oil Service Index plunging by 3 percent. With the drop, the index pulled back further off the four-month closing high set last Wednesday.

The weakness among oil service stocks came amid a steep drop by the price of crude oil, with crude for June delivery tumbling $1.27 to $56.61 a barrel.

Natural gas and utilities stocks also moved notably lower on the day, dragging the NYSE Arca Natural Gas Index and the Dow Jones Utilities Average down by 1.5 percent and 1 percent, respectively.

On the other hand, considerable strength emerged among airline stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Airline Index. The index reached its best closing level in almost a month.

Networking, pharmaceutical, and gold stocks also saw some strength on the day, partly offsetting the weakness in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.4 percent, while Hong Kong's Hang Seng Index soared by 2.8 percent.

The major European markets also ended the day in positive territory. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index edged up by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries showed a lack of direction for much of the session before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 1.916 percent.

Looking Ahead

Earnings news is likely to remain in focus after the close of trading, with Chipotle Mexican Grill (CMG), Yahoo (YHOO) and Yum! Brands (YUM) among the companies releasing their quarterly results.

Additionally, Boeing (BA), Coca-Cola (KO), and McDonald's (MCD) are due to report their results before the start of trading on Wednesday.

Trading on Wednesday could also be impacted by the release of the National Association of Realtors' report on existing home sales in the month of March.