Stocks Showing A Lack Of Direction In Morning Trading - US Commentary

WASHINGTON (Alliance News) - Following the weakness seen in the previous session, stocks have ...

Alliance News 6 December, 2017 | 3:41PM
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WASHINGTON (Alliance News) - Following the weakness seen in the previous session, stocks have shown a lack of direction over the course of morning trading on Wednesday. The major averages have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest losses on the day. The Dow is down 24.93 points or 0.1% at 24,155.71, the Nasdaq is down 3.80 points or 0.1% at 6,758.41 and the S&P 500 is down 2.88 points or 0.1% at 2,626.69.

The choppy trading on Wall Street comes amid uncertainty about the economic impact of the Republican tax reform plan.

Traders have largely shrugged off a report from payroll processor ADP showing a slightly bigger than expected increase in private sector employment generating some positive sentiment.

ADP said private sector employment climbed by 190,000 jobs in November after surging up by 235,000 jobs in October. Economists had expected an increase of about 185,000 jobs.

A separate report from the Labor Department showed a significant increase in labor productivity in the third quarter.

The report said labor productivity jumped by 3.0% in the third quarter, unchanged from the preliminary estimate. Economists had expected the increase in productivity to be upwardly revised to 3.3%.

Meanwhile, the Labor Department said unit labor costs fell by a revised 0.2% in the third quarter compared to the previously reported 0.5% increase. Costs had been expected to rise by a revised 0.2%.

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

Energy stocks are seeing considerable weakness, however, with a decrease by the price of crude oil weighing on the sector. Crude for January delivery is sliding USD0.81 to USD56.81 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 1.9% and the NYSE Arca Natural Gas Index is down by 1.5%.

While gold stocks have also moved to the downside despite an increase by the price of the precious metal, notable strength is visible among steel stocks.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 2%, while Hong Kong's Hang Seng Index plunged by 2.1%.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the UK's FTSE 100 Index has risen by 0.4%, the French CAC 40 Index is down by 0.2% and the German DAX Index is down by 0.7%.

In the bond market, treasuries have shown a strong move to the upside due to their appeal as a safe haven. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 2.319%.

Copyright RTT News/dpa-AFX

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