Stocks Showing A Lack Of Direction Following Mixed Data - U.S. Commentary

(RTTNews) - With traders digesting a mixed batch of U.S. economic data, stocks are turning in yet another lackluster performance in early trading on Wednesday. The major averages initially moved to the downside but have bounced back near the unchanged line since then.

Currently, the major averages are turning in a mixed performance. While the tech-heavy Nasdaq is up 3.32 points or 0.1 percent at 4,237.40, the Dow is down 28.61 points or 0.2 percent at 16,693.73 and the S&P 500 is down 1.46 points or 0.1 percent at 1,922.78.

A disappointing report on private sector employment contributed to the initial weakness on Wall Street, although selling pressure has waned following the release of a separate report showing faster than expected service sector growth.

Before the start of trading, payroll processor ADP released a report showing that the pace of private sector job growth slowed more than expected in May.

ADP said private sector employment rose by 179,000 jobs in May following an increase of 215,000 jobs in April. Economists had been expecting an increase of about 210,000 jobs.

The Commerce Department also released a report showing that the U.S. trade deficit widened by much more than expected in April amid a drop in the value of exports and an increase in the value of imports.

Meanwhile, the Institute for Supply Management recently released a separate report showing that its index of activity in the sector rose by more than economists had anticipated in the month of May.

The ISM said its non-manufacturing index climbed to 56.3 in May from 55.2 in April, with a reading above 50 indicating growth in the service sector. Economists had been expecting the index to show a more modest increase to a reading of 55.5.

The mixed data has added to recent uncertainty about the economy's ability to sustain its recovery from the winter doldrums.

Traders also remain reluctant to make any significant moves ahead of the European Central Bank meeting on Thursday and the release of the closely watched monthly U.S. jobs report on Friday.

Most of the major sectors are showing only modest moves, although considerable strength has emerged among biotechnology stocks. The NYSE Arca Biotechnology Index has risen by 1.2 percent to its best intraday level in two months.

Exact Sciences (EXAS) is leading the biotech sector higher, with the molecular diagnostics company surging up by 6.7 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index both fell by 0.6 percent. However, Japan's Nikkei 225 Index bucked the downtrend and edged up by 0.2 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has dropped by 0.3 percent, the French CAC 40 Index and the German DAX Index are both down by 0.2 percent.

In the bond market, treasuries have moved modestly lower, extending the recent pullback off last week's highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 2.608 percent.