Stocks Close Mixed For Second Consecutive Session - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks gave back ground over the course of the trading session on Wednesday. The major averages eventually closed mixed for the second consecutive session.

The tech-heavy Nasdaq fell 25.62 points or 0.6 percent to 4,572.57, pulling back off the fourteen-year closing high set in the previous session. The S&P 500 also edged down 1.56 points or 0.1 percent to 2,000.72, while the Dow crept up 10.72 points or 0.1 percent to 17,078.28.

The initial strength on Wall Street was partly due to easing geopolitical concerns amid news of a possible ceasefire in Ukraine.

Ukrainian President Petro Poroshenko released a statement indicating that a phone conversation with Russian President Vladimir Putin resulted in an agreement on a "ceasefire process" for the eastern part of the country.

Poroshenko toned down an earlier statement announcing a "permanent ceasefire" agreement following denials from the Kremlin.

The Kremlin noted that Putin and Poroshenko expressed largely similar views on possible ways to end the crisis but argued that Putin could not agree to a ceasefire because Russia is not party to the conflict.

Early buying interest was also generated by upbeat economic news out of China, with a report showing that Chinese service sector activity grew at a faster rate in August.

Nonetheless, traders seemed reluctant to continue buying stocks ahead of the European Central Bank's monetary policy announcement on Thursday and the release of the monthly U.S. jobs report on Friday.

A notable decline by shares of Apple (AAPL) contributed to the subsequent pullback by the markets, with the tech giant tumbling by 4.2 percent.

The steep drop came after Apple ended the previous session at a record closing high and partly reflected concerns that the iPhone 6 will fail to live up to expectations.

In U.S. economic news, the Commerce Department released a report showing a sharp jump in factory orders in the month of July, with orders for transportation equipment showing a substantial increase.

The report said factory orders soared by 10.5 percent in July after climbing by an upwardly revised 1.5 percent in June.

The surge in factory orders reflected the biggest monthly increase on record but still fell short of the 10.9 percent jump expected by economists.

Sector News

While many of the major sectors ended the day showing only modest moves, significant weakness was visible among housing stocks. Reflecting the weakness in the housing sector, the Philadelphia Housing Sector Index fell by 1.6 percent.

Toll Brothers (TOL) helped to lead the housing sector lower, with the luxury homebuilder falling by 4.7 percent despite reporting stronger than expected third quarter earnings growth.

Airline stocks also saw considerable weakness on the day, giving back some ground after ending the previous session sharply higher. The NYSE Arca Airline Index dropped 1.2 percent, pulling back off yesterday's twelve-year closing high.

On the other hand, notable strength was visible among steel stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Steel Index. The strength in the sector came on the heels of news that Morgan Stanley raised its view of the steel industry to Attractive.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index surged up by 2.3 percent.

The major European markets also showed notable moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.7 percent, the French CAC 40 Index and the German DAX Index jumped by 1 percent and 1.3 percent, respectively.

In the bond market, treasuries turned higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by nearly a basis point to 2.41 percent.

Looking Ahead

While the ECB decision is likely to be in focus on Thursday, traders are also likely to keep an eye on U.S. reports on private sector employment, international trade, and service sector activity.