Following the sell-off seen during Tuesday’s session, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually finished the day narrowly mixed. While the Dow inched up 38.04 points or 0.1 percent to 40,974.97, the S&P 500 (SPI:SP500) dipped 8.86 points or 0.2 percent to 5,520.07 and the Nasdaq fell 52.00 points or 0.3 percent to 17,084.30.

The lackluster performance on Wall Street may have reflected uncertainty about the near-term outlook for the markets following the substantial volatility seen over the past couple months.

While stocks reached new record highs in mid-July, the markets experienced a significant sell-off in early August amid concerns about the economic outlook.

Stocks have subsequently shown a substantial rebound, with the Dow recently reaching a new record high, as traders expressed optimism about the Federal Reserve lowering interest rates later this month.

However, worries about the economy continue to hang over the markets following yesterday’s disappointing readings on manufacturing activity.

The Labor Department also released a report this morning showing a bigger than expected decrease by job openings in the U.S. in the month of July.

The Labor Department said job openings edged to 7.67 million in July from a downwardly revised 7.91 million in June.

Economists had expected jobless claims to dip to 8.10 million from the 8.18 million originally reported for the previous month.

“The report offers further evidence of cooler labor market conditions but doesn’t change our call for the Federal Reserve to begin the process of normalizing interest rates with a 25bp cut at the FOMC meeting on September 18,” said Nancy Vanden Houten, U.S. Lead Economist at Oxford Economics.

She added, “The pace of hiring ticked up slightly, but layoffs and other separations increased, suggesting some downside risk to our forecast for August job growth of 170,000.”

Sector News

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

However, energy stocks saw considerable weakness on the day, as the price of crude tumbled below $70 a barrel to its lowest levels in nine months.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service and the NYSE Arca Oil Index both slid by 1.5 percent.

Gold, steel and computer hardware stocks also saw further downside, while telecom stocks moved sharply higher, driving the NYSE Arca North American Telecom Index up by 2.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index plummeted by 4.2 percent, while Hong Kong’s Hang Seng Index dove by 1.1 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index slumped by 1.0 percent, the German DAX Index slid by 0.8 percent and the U.K.’s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries extended the notable rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 7.6 basis points to 3.768 percent.

Looking Ahead

Reports on jobless claims, private sector employment and service sector activity are likely to attract attention on Thursday, although trading may be somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.

SOURCE: RTTNEWS