Stocks Turning In Lackluster Performance In Mid-Day Trading - U.S. Commentary

(RTTNews) - After coming under pressure in early trading, stocks have fluctuated over the course of the trading session on Wednesday. The choppy trading comes on the heels of the strong upward move seen over the two previous sessions.

Currently, the major averages are turning in a mixed performance, with the S&P 500 just below the unchanged line. While the S&P 500 is down 0.15 points or less than 0.1 percent at 2,049.88, the Dow is up 59.09 points or 0.3 percent at 17,725.49 and the Nasdaq is up 3.81 points or 0.1 percent at 4,731.55.

The lackluster performance on Wall Street may partly reflect uncertainty about the near-term outlook for the markets following recent volatility.

The major averages have shown big swings back and forth throughout the early part of the New Year, although they have largely remained rangebound.

Earlier in the session, selling pressure was generated by a sharp pullback by the price of crude oil, which is moving back to the downside after spiking higher in the three previous sessions.

Crude for March delivery is currently tumbling $2.96 to $50.09 a barrel after ending the previous session at its highest closing level of 2015.

Negative sentiment was also generated by a report showing weaker than expected private sector job growth, with the data raising concerns about Friday's Labor Department report.

Payroll processor ADP said private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December. Economists had expected employment to climb by about 223,000 jobs.

Mark Zandi, chief economist of Moody's Analytics, said, "Employment posted another solid gain in January, although the pace of growth is slower than in recent months."

"Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring," he added.

Meanwhile, a separate report from the Institute for Supply Management showed a modest uptick by its index of activity in the service sector.

The ISM said its non-manufacturing index inched up to 56.7 in January from an upwardly revised 56.5 in December, with a reading above 50 indicating growth in the service sector.

Sector News

While many of the major sectors are showing only modest moves on the day, significant weakness remains visible among steel stocks. The NYSE Arca Steel Index has tumbled by 2.4 percent after closing high for three consecutive sessions.

A.M. Castle (CAS), Cliffs Natural Resources (CLF) and U.S. Steel (X) are turning in some of the sector's worst performances in mid-day trading.

Energy stocks also remain under pressure amid the decrease by the price of crude oil, giving back some ground following recent strength.

On the other hand, airline stocks have shown a strong move to the upside on the day, driving the NYSE Arca Airline Index up by 2.5 percent. United Continental (UAL) and American Airlines (AAL) are posting standout gains.

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 2 percent, while Hong Kong's Hang Seng Index advanced by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the German DAX Index and the French CAC 40 Index rose by 0.2 percent and 0.4 percent, respectively.

In the bond market, treasuries have moved to the downside, extending the sell-off seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.6 basis points at 1.826 percent.