Stocks Regain Ground After Seeing Initial Weakness - U.S. Commentary

(RTTNews) - After moving sharply lower over the two previous sessions, stocks are showing a lack of direction in early trading on Tuesday. The major averages showed steep drops at the start of trading but have climbed well off their worst levels since then.

Currently, the major averages are posting modest losses on the day. The Dow is down 77.05 points or 0.5 percent at 15,950.00, the Nasdaq is down 5.84 points or 0.1 percent at 4,277.92 and the S&P 500 is down 5.94 points or 0.3 percent at 1,847.50.

The recovery from the initial weakness is partly due to an increase by the price of crude oil, with crude for March delivery climbing $0.35 to $30.04 a barrel.

The price of crude oil has seen considerable volatility on the day after tumbling $1.20 to $29.69 a barrel in the previous session.

Nonetheless, a lack of major U.S. economic data is contributing to choppy trading on Wall Street, as traders look ahead to Federal Reserve Chair Janet Yellen's congressional testimony in the coming days.

The markets are likely to pay close attention to Yellen's remarks in an effort to gain some insight into the outlook for interest rates.

The Energy Information Administration is also due to release its weekly oil inventories report on Wednesday, potentially driving the price of crude oil.

Many of the major sectors are showing only modest moves, although considerable weakness is visible among oil service stocks.

Despite the increase by the price of crude oil, the Philadelphia Oil Service Index has tumbled by 3.4 percent in early trading.

Steel, natural gas, and commercial real estate stocks are also seeing early weakness, while strength has emerged among airline and railroad stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although several markets remained closed for holidays. Japan's Nikkei 225 Index plummeted by 5.4 percent, while Australia's All Ordinaries Index slumped by 2.8 percent.

The major European markets are also seeing some weakness on the day. While the French CAC 40 Index has tumbled by 1.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.8 percent and 0.7 percent, respectively.

In the bond market, treasuries are turning in a lackluster performance after rising sharply on Monday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.74 percent.