Stocks Mixed Ahead Of Fed's Policy Announcement - U.S. Commentary

(RTTNews) - Stocks are turning in a relatively lackluster performance in mid-day trading on Wednesday after failing to sustain an initial upward move. The choppy trading on the day comes after the markets also showed a lack of direction in the previous session.

Currently, the major averages are on opposite sides of the unchanged line. While the Nasdaq is up 22.94 points or 0.5 percent at 5,132.98, the Dow is down 17.16 points or 0.1 percent at 18,456.59 and the S&P 500 is down 4.70 points or 0.2 percent at 2,164.48.

The initial strength on Wall Street was partly due to a positive reaction to quarterly results from tech giant Apple (AAPL).

After the close of trading on Tuesday, Apple reported better than expected third quarter results and issued positive revenue guidance for the fourth quarter.

However, traders seemed somewhat reluctant to continue buying stocks ahead of the Federal Reserve's monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged as officials wait to see the fallout from Britain's vote to leave the European Union.

The central bank's accompanying statement is still likely to be in focus, as investors attempt to gauge the outlook for the next rate hike.

Buying interest was also offset by the release of some disappointing U.S. economic data, including a Commerce Department report showing a much bigger than expected drop in durable goods orders in the month of June.

The report said durable goods orders tumbled by 4.0 percent in June following a revised 2.8 percent decrease in May.

Economists had expected durable goods orders to dip by 1.3 percent compared to the 2.2 percent decline originally reported for the previous month.

Excluding orders for transportation equipment, durable goods orders edged down by 0.5 percent in June after slipping by 0.4 percent in May. Ex-transportation orders had been expected to rise by 0.3 percent.

A separate report from the National Association of Realtors showed a much smaller than expected increase in pending home sales in the month of June.

NAR said its pending home sales index edged up by 0.2 percent to 111.0 in June after tumbling by 3.7 percent to 110.8 in May. Economists had expected the index to jump by 1.3 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

Most of the major sectors are showing only modest moves on the day, although considerable weakness is visible among trucking stocks. Reflecting the weakness in the trucking sector, the Dow Jones Trucking Index is down by 2 percent.

Ryder (R) and C.H. Robinson (CHRW) are turning in two of the trucking sector's worst performances in mid-day trading.

Energy stocks have also come under pressure amid a decrease by the price of crude oil. Crude for September delivery is currently sliding $0.82 to $42.10 a barrel.

Railroad, networking, and electronic storage stocks are also seeing notable weakness, while gold stocks have moved higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged up by 1.7 percent, while Hong Kong's Hang Seng Index climbed by 0.4 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index jumped by 1.2 percent, the German DAX Index advanced by 0.7 percent and the U.K.'s FTSE 100 Index rose by 0.4 percent.

In the bond market, treasuries have moved higher following the disappointing U.S. economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 1.539 percent.