Stocks Close Mixed Following Lackluster Trading Day - U.S. Commentary

(RTTNews) - After trending higher over the past few sessions, stocks showed a lack of direction throughout the trading day on Wednesday before closing mixed.

The major averages eventually ended the day on opposite sides of the unchanged line, with the Nasdaq posting a modest gain.

While the Nasdaq inched up 10.24 points or 0.2 percent to 4,201.29, the Dow dipped 30.83 points or 0.2 percent to 15,963.94 and the S&P 500 edged down 0.49 points or less than a tenth of a percent to 1,819.26.

The choppy trading on Wall Street came as traders seemed reluctant to make any significant moves amid a lack of major U.S. economic data.

Uncertainty about the near-term outlook for the markets also likely kept traders on the sidelines following the volatility seen over the past month.

Peter Boockvar, chief market analyst at the Lindsey Group, noted that the S&P 500 has gone from deeply oversold last Wednesday to the most overbought of 2014 yesterday as measured by the McClellan Oscillator on Bloomberg.

"Where we go from here therefore will be most telling, as a continued rally will then assume a potential breakout while a sell-off would confirm a failed rally below the highs," Boockvar said.

He added, "As long as the 'measured' taper is on track, I'm still in the latter camp but the end of QE and a path to normalized interest rates is long term bullish however difficult the path."

Traders were also looking ahead to Thursday, which will see the release of some key economic data along with new Fed Chair Janet Yellen's second day of testimony on Capitol Hill.

Among individual stocks, a notable drop by shares of Procter & Gamble (PG) weighed on the Dow, with the consumer products giant falling by 1.7 percent after lowering its 2014 profit forecast due in part to Venezuela's currency devaluation.

Managed care provider WellCare (WCG) also posted a steep loss on the day after reporting weaker than expected fourth quarter results and providing disappointing guidance.

On the other hand, shares of Owens Corning (OC) moved sharply higher after the building materials maker reported better than expected fourth quarter earnings and declared its first dividend in fourteen years.

Sector News

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

Gold stocks saw substantial weakness, however, giving back some ground after moving sharply higher over the past few sessions. The NYSE Arca Gold Bugs Index tumbled by 2.8 percent, pulling back off yesterday's three-month closing high.

Notable weakness was also visible among tobacco stocks, while semiconductor and telecom stocks moved to the upside on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.6 percent, while Hong Kong's Hang Seng Index surged up by 1.5 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index crept up by less than a tenth of a percent, the French CAC 40 Index and the German DAX Index rose by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries moved moderately lower, pulling back further off the highs set early this month. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.4 basis points to 2.763 percent.

Looking Ahead

Trading activity is likely to pick up on Thursday amid the release of reports on weekly jobless claims, retail sales, and business inventories. Yellen's second day of testimony may also attract some attention.

Earnings news from Cisco Systems (CSCO) could also impact trading, with the networking giant among the companies releasing their quarterly results after the close of today's trading.