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After coming under pressure early in the session, stocks regained ground over the course of the trading day on Tuesday. The major averages climbed well off their worst levels of the day before ending the day little changed.
The major averages moved to the downside going into the close, finishing narrowly mixed. While the Nasdaq rose 33.12 points or 0.2 percent to 18,573.13, the Dow edged down 6.71 points or less than a tenth of a percent to 42,924.89 and the S&P 500 (SPI:SP500) slipped 2.78 points or 0.1 percent to 5,851.20.
The early weakness on Wall Street partly reflected renewed concerns about the outlook for interest rates following a recent surge by U.S. treasury yields.
Treasury yields have moved notably higher in recent days amid worries about the U.S. fiscal deficit and comments from Federal Reserve officials hinting at gradual rate cuts.
After the Fed slashed interest rates by 50 basis points last month, CME Group’s FedWatch Tool is currently indicating an 89.6 percent chance of just a 25 basis point rate cut next month.
The subsequent recovery by the markets came even though the yield on the benchmark ten-year note crept up to a nearly three-month closing high, as traders remain optimistic about the economic outlook
A steep drop by shares of Verizon (NYSE:VZ) contributed to the dip by the Dow, with the telecom giant tumbling by 5.0 percent on the day.
The slump by Verizon came after the company reported third quarter earnings that beat analyst estimates but weaker than expected revenues.
Fellow Dow component 3M (NYSE:MMM) also moved to the downside even though the industrial conglomerate reported third quarter earnings that exceeded expectations.
On the other hand, shares of General Motors (NYSE:GM) spiked by 9.8 percent after the auto giant reported better than expected third quarter results.
Housing stocks moved sharply lower amid concerns about the outlook for interest rates, resulting in a 3.1 percent plunge by the Philadelphia Housing Sector Index. The index pulled back further off the record closing high set last Friday.
Substantial weakness was also visible among computer hardware stocks, as reflected by the 2.3 percent slump by the NYSE Arca Computer Hardware Index.
Logitech (NASDAQ:LOGI) helped lead the sector lower, with the computer accessories maker plummeting by 8.5 percent despite reporting better than expected fiscal second quarter results.
Telecom and airline stocks also saw notable weakness on the day, while tobacco and gold stocks showed significant moves to the upside.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.4 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets saw modest weakness on the day. While the French CAC 40 Index closed just below the unchanged line, the U.K.’s FTSE 100 Index edged down by 0.1 percent and the German DAX Index dipped by 0.2 percent.
In the bond market, treasuries moved modestly lower after showing a lack of direction early in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up 2.2 basis points to 4.204 percent.
Earnings news is likely to be in focus on Wednesday, with AT&T (T), Boeing (BA) and Coca-Cola (KO) among the companies due to release their quarterly results before the start of trading.
SOURCE: RTTNEWS
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