Stocks Turning In A Lackluster Performance In Early Trading - U.S. Commentary

(RTTNews) - With traders seemingly reluctant to make any significant moves, stocks are showing a lack of direction in early trading on Tuesday. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 1.21 points or less than 0.1 percent at 5,077.23, the Dow is up 15.82 points or 0.1 percent at 18,314.70 and the S&P 500 is up 0.84 points or less than 0.1 percent at 2,130.04.

The lackluster performance on Wall Street comes after yesterday's gains lifted the Dow and the S&P 500 to new record closing highs.

Uncertainty about whether stocks can sustain the recent upward move seems to be keeping some traders on the sidelines.

Meanwhile, a Commerce Department report showing a sharp jump in housing starts has generated some optimism about the economy but has also contributed to a significant increase in bond yields.

The report said housing starts surged up 20.2 percent to an annual rate of 1.135 million in April from the revised March estimate of 944,000.

Economists had expected housing starts to climb to a rate of 1.029 million from the 926,000 originally reported for the previous month.

With the bigger than expected increase, housing starts reached their highest level since hitting 1.197 million in November of 2007.

Building permits, an indicator of future housing demand, also increased by 10.1 percent to an annual rate of 1.143 million in April from the revised March rate of 1.038 million.

Jennifer Lee, senior economist at BMO Capital, said, "U.S. second quarter growth may have been revised down recently but at least there will be upward support from residential construction."

Most of the major sectors are showing only modest moves in early trading, although energy stocks have come under pressure along with the price of crude oil.

Crude for June delivery is currently tumbling $1.53 to $57.90 a barrel after dipping $0.26 to $58.43 a barrel on Monday.

Gold and steel stocks are also seeing early weakness, while banking stocks have shown a strong move to the upside on the day.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.7 percent, while Australia's All Ordinaries Index fell by 0.7 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.'s FTSE 100 Index has climbed by 0.4 percent, the French CAC 40 Index and the German DAX Index are jumping by 2.1 percent and 2.2 percent, respectively.

In the bond market, treasuries are extending yesterday's pullback following the upbeat housing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.6 basis points at 2.274 percent.