Stocks Continue To Show A Lack Of Direction In Mid-Day Trading - U.S. Commentary

(RTTNews) - Stocks have shown a lack of direction throughout the trading day on Tuesday, as traders seem reluctant to make any significant moves. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest losses on the day. The Dow is down 5.81 points or less than a tenth of a percent at 15,970.21, the Nasdaq is down 2.76 points or 0.1 percent at 3,986.30 and the S&P 500 is down 1.98 points or 0.1 percent at 1,789.55.

The choppy trading on Wall Street comes as traders are looking ahead to the release of some closely watched economic data on Wednesday, including reports on retail sales, consumer prices, and existing home sales.

The reports could have a significant impact on expectations regarding when the Federal Reserve will begin scaling back its asset purchase program.

In light of the focus on the outlook for the Fed's stimulus program, traders are also likely to keep a close eye on remarks by Fed Chairman Ben Bernanke.

Bernanke is scheduled to deliver the Herbert Stein Memorial Lecture at the National Economists Club's annual dinner in Washington at 7 pm ET.

Meanwhile, traders have largely shrugged off a report from the Labor Department showing that employee compensation costs rose by slightly less than expected in the third quarter.

The Labor Department said its employment cost index rose by 0.4 percent in the third quarter following a 0.5 percent increase in the second quarter. Economists had expected the index to rise by another 0.5 percent.

Among individual stocks, Dow component Home Depot (HD) has moved to the upside after the home improvement retailer reported better than expected third quarter earnings. The company also raised its full-year earnings and sales guidance.

Networking equipment maker Brocade Communications (BRCD) is also turning in a strong performance after reporting fourth quarter results that exceeded analyst estimates.

On the other hand, shares of Best Buy (BBY) have come under pressure after the consumer electronics retailer reported better than expected third quarter results but warned that its holiday promotions could have a negative impact on margins in the fourth quarter.

Sector News

Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Trucking stocks are seeing considerable weakness, however, with the Dow Jones Trucking Index down by 1.5 percent. C.H. Robinson (CHRW), Con-way (CNW), and J.B. Hunt (JBHT) are posting notable losses on the day.

Weakness is also visible among railroad stocks, as reflected by the 1.1 percent drop by the Dow Jones Railroad Index. The index is pulling back off yesterday's record closing high.

Tobacco and utilities stocks have also moved to the downside, while brokerage, banking, and airline stocks are seeing some strength on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index edged down by 0.2 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index dropped by 1.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index both fell by 0.4 percent.

In the bond market, treasuries are seeing modest weakness after ending the previous session moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.4 basis points at 2.692 percent.