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Stocks Climb Off Worst Levels But Close Modestly Lower - US Commentary

WASHINGTON (Alliance News) - After an initial move to the downside, stocks regained some ground ...

Alliance News 14 November, 2017 | 9:14PM
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WASHINGTON (Alliance News) - After an initial move to the downside, stocks regained some ground over the course of the trading session on Tuesday but remained in the red. The major averages offset the modest gains posted in the previous session.

The major averages ended the day in negative territory but well off their lows of the session. The Dow edged down 30.23 points or 0.1% to 23,409.47, the Nasdaq fell 19.72 points or 0.3% to 6,737.87 and the S&P 500 dipped 5.97 points or 0.2% to 2,578.87.

Lingering uncertainty about the outlook for the Republican tax reform proposal weighed on the markets as the House prepares to vote on their bill later this week.

The House bill has significant differences from the Senate version, raising concerns about whether GOP lawmakers will be able to work together to combine the legislation.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, delayed the release of his modified version of the Senate tax reform bill.

On the US economic front, the Labor Department released a report showing producer prices increased by more than anticipated in the month of October.

The Labor Department said its producer price index for final demand climbed by 0.4% in October, matching the increase seen in September. Economists had expected prices to inch up by 0.1%.

Excluding food and energy prices, core producer prices also rose by 0.4% in October after a matching increase in the previous month. Core prices had been expected to rise by 0.2%.

Energy stocks showed a significant move to the downside on the day amid a steep drop by the price of crude oil. Crude for December delivery tumbled USD1.06 to USD55.70 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 3.8% and the NYSE Arca Natural gas Index slumped by 2.6%.

Substantial weakness was also visible among steel stocks, as reflected by the 2.9% loss posted by the NYSE Arca Steel Index. With the drop, the index fell to its lowest closing level in well over two months.

Biotechnology and chemical stocks also saw notable weakness, while considerable strength was visible among utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index dipped by 0.1%.

The major European markets also moved lower on the day. While the UK's FTSE 100 Index edged down by less than a tenth of a %, the German DAX Index fell by 0.3% and the French CAC 40 Index slumped by 0.5%.

In the bond market, treasuries moved to the upside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ped by 1.9 basis points to 2.381%.

Looking Ahead

Economic data is likely to be in focus on Wednesday, with traders likely to keep a close eye on reports on retail sales, consumer prices, and New York-area manufacturing activity.

On the earnings front, discount retailer Target (TGT) is among the companies due to release their quarterly results before the start of trading on Wednesday.

Copyright RTT News/dpa-AFX

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