U.S. Stocks Close Little Changed For Second Straight Day

After recovering from an early move to the downside, stocks showed a lack of direction over the course of the trading session. The major averages spent much of the afternoon lingering near the unchanged line.

The major averages eventually closed little changed for the second straight session. While the Nasdaq crept up 3.81 points or less than a tenth of a percent to 12,157.23, the S&P 500 edged down 0.35 points or less than a tenth of a percent to 4,154.52 and the Dow dipped 79.62 points or 0.2 percent to33,897.01.

The choppy trading on Wall Street came as traders reacted the latest earnings news, with shares of Netflix (NFLX) moving sharply lower after the streaming giant reported weaker than expected first quarter revenues.

Financial giant Morgan Stanley (MS) also moved to the downside early in the session despite reporting first quarter results that exceeded analyst estimates. Shares of Morgan Stanley eventually closed in positive territory.

Meanwhile, shares of Travelers (TRV) showed a substantial move to the upside after the insurance giant reported better than expected first quarter results.

Some negative sentiment was generated in reaction to a jump in treasury yields, with the yield on the benchmark ten-year note reaching its highest levels in nearly a month.

The increase in treasury yields reflected concerns about global inflation after a report showed U.K. consumer prices increased more than expected in March.

On the U.S. economic front, the Federal Reserve released its Beige Book report, noting U.S. economic activity was little changed in recent weeks.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said nine districts reported either no change or only a slight change in activity while three indicated modest growth.

With regard to inflation, the Beige Book said overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.

Sector News

Despite the lackluster performance by the broader markets, computer hardware stocks moved sharply lower on the day. The NYSE Arca Computer Hardware Index plunged by 3.1 percent after ending Tuesday’s trading at a two-month closing high.

Networking stocks also saw substantial weakness on the day, dragging the NYSE Arca Networking Index down by 2.7 percent to its lowest closing level in over three months.

Significant weakness was also visible among steel stocks, as reflected by the 2.2 percent slump by the NYSE Arca Steel Index.

Gold and semiconductor stocks also saw notable weakness, while banking stocks showed a strong move to the upside, driving the KBW Bank Index up by 1.7 percent to its best closing level in a month.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while South Korea’s Kospi crept up by 0.2 percent.

The major European markets also turned mixed on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.3 percent.

In the bond market, treasuries moved back to the downside following the uptick seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3 basis points to 3.602 percent.

Looking Ahead

While earnings news is likely to remain in focus on Thursday, trading may also be impacted by reaction to reports on weekly jobless claims, existing home and leading economic indicators.

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