U.S. Stocks Continue To Show A Lack Of Direction
After showing a lack of direction earlier in the session, stocks continue to turn in a lackluster performance in afternoon trading on Tuesday. The major averages have spent the day bouncing back and forth across the unchanged line.
In recent trading, the major averages showed a notable move to the downside, although the Nasdaq has subsequently bounced back above the unchanged line.
Currently, the Nasdaq is up 1.82 points or less than a tenth of a percent at 9,194.16, while the Dow is down 88.44 points or 0.4 percent at 24,133.55 and the S&P 500 is down 12.98 points or 0.4 percent at 2,917.34.
The choppy trading on Wall Street may reflect uncertainty about the near-term outlook for the markets following the rebound seen over the past several weeks.
The tech-heavy Nasdaq has shown a particularly strong upward move, soaring 34 percent since hitting its lowest closing level in over a year on March 23rd.
The Nasdaq has climbed firmly into positive territory for 2020 in recent sessions and ended Monday’s trading just 6.6 percent below the record closing high set in February.
Stocks have recently benefitted from optimism about the U.S. reopening following the coronavirus induced economic shutdown.
Hopes for a quick economic recovery have helped the markets shrug off dismal economic data as well as recent signs of a second wave of coronavirus infections in countries like South Korea and China.
The Nasdaq has benefited from strong gains by tech giants like Amazon (AMZN) and Netflix (NFLX), which have seen their businesses hold up well in the face of the coronavirus pandemic.
Traders are also keeping an eye on testimony by infectious disease expert Dr. Anthony Fauci and other members of the White House coronavirus task force before the Senate Health, Education, Labor and Pensions Committee.
Fauci told the committee a vaccine is essential to stopping the spread of the coronavirus but noted a usable vaccine will not be ready in the near term.
“Even at the top speed we’re going, we don’t see a vaccine playing in the ability of individuals to get back to school this term,” Fauci said.
Fauci also warned that cities and states that reopen prematurely risk seeing “little spikes that might turn into outbreaks.”
In an email to the New York Times reporter Sheryl Gay Stolberg ahead of his testimony, Fauci said he intended to warn the committee that opening the country prematurely could result in “needless suffering and death.”
Most of the major sectors continue to show only modest moves on the day, contributing to the lackluster performance by the broader markets.
Commercial real estate stocks continue to see substantial weakness, however, resulting in a 3.2 percent nosedive by the Dow Jones U.S. Real Estate Index.
Notable weakness also remains visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index slumping by 2.3 percent and 2.6 percent, respectively.
On the other hand, gold stocks have pulled back off their best levels but continue to see considerable strength amid an increase by the price of the precious metal.
With gold for June delivery climbing $8.80 to $1,706.80 an ounce, the NYSE Arca Gold Bugs Index has surged up by 1.9 percent.
Biotechnology stocks have also moved notably higher over the course of the session, driving the NYSE Arca Biotechnology Index up by 1.6 percent to a new record intraday high.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both edged down by 0.1 percent, while Hong Kong’s Hang Seng Index tumbled by 1.5 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index advanced by 0.9 percent, the German DAX Index dipped by 0.1 percent and the French CAC 40 Index fell by 0.4 percent.
In the bond market, treasuries are regaining ground over moving sharply lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.6 basis points at 0.670 percent.
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