Stocks Close Modestly Lower Following Choppy Trading Day - U.S. Commentary

(RTTNews) - After failing to sustain an early upward move, stocks showed a lack of direction throughout much of the trading day on Wednesday. The major averages bounced back and forth across the unchanged before ending the session modestly lower.

The major averages added to the steep losses posted in the previous session, falling to their lowest levels in a month. The Dow slipped 27.55 points or 0.2 percent to 17,635.39, the Nasdaq edged down 9.85 points or 0.2 percent to 4,849.94 and the S&P 500 dipped 3.92 points or 0.2 percent to 2,040.24.

Bargain hunting contributed to the early strength on Wall Street, but traders seemed reluctant to get back into the markets ahead of the Federal Reserve's monetary policy meeting next week.

While the Fed is not expected to raise interest rates at the meeting, recent upbeat jobs data may lead the central bank to signal that a rate hike is on the horizon.

Continued strength in the value of the U.S. dollar and uncertainty about the situation in Greece also helped to limit the upside for the markets.

Peter Boockvar, managing director at the Lindsey Group, suggested that the markets have "no memory day to day" but noted that stocks still face numerous challenges.

Boockvar specifically pointed to "a deteriorating earnings picture, a likely rate hike in a few months, extreme valuations on many metrics outside of one year forward earnings, mixed economic data and excessive bullishness."

Among individual stocks, shares of Brown Shoe (BWS) came under pressure after the global footwear company reported fourth quarter earnings that beat estimates but provided disappointing guidance.

Chinese online media company SINA (SINA) also moved notably lower after reporting better than expected fourth quarter results but issuing lukewarm revenue guidance for the full year.

On the other hand, shares of Express (EXPR) showed a strong move to the upside after the apparel retailer reported better than expected fourth quarter results and provided upbeat guidance.

Sector News

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

Telecom stocks came under considerable selling pressure, however, with the NYSE Arca Telecom Index falling by 1.4 percent. With the drop, the index fell to its lowest closing level in a month.

Within the telecom sector, AT&T (T) moved lower after revealing that it expects to take a $130 million charged related to the voluntary retirement of about 3,000 workers.

Notable weakness was also visible among computer hardware stocks, which saw further downside after turning in some of the worst performances on Tuesday.

Meanwhile, gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.3 percent. The rally came despite a decrease by the price of gold.

Transportation, natural gas, and brokerage stocks also saw some strength, partly offsetting the losses posted in the previous session.

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 rose by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.8 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.3 percent, the French CAC 40 Index and the German DAX Index soared by 2.4 percent and 2.7 percent, respectively.

In the bond market, treasuries moved modestly higher in reaction to the results of a ten-year note auction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 2.109 percent.

Looking Ahead

Following several quiet days on the U.S. economic front, traders will be presented with a slew of data on Thursday, including reports on retail sales and weekly jobless claims.