Stocks Close Nearly Flat Following Volatile Trading Session - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Wednesday before ending the session nearly flat. Relatively light trading activity may have contributed to the volatility on Wall Street as some traders enjoy time away from their desks.

The major averages ended the day near the unchanged line, with the S&P 500 inching up just 0.03 points to 1,920.24. The Dow edged up 13.87 points or 0.1 percent to 16,443.34 and the Nasdaq crept up 2.22 points or 0.1 percent to 4,355.05.

The markets extended their recent downward trend in early trading amid concerns about the ongoing conflict in Ukraine.

News of intense fighting in the eastern Ukrainian city of Donetsk generated some selling pressure as government forces continued their offensive against pro-Russian separatists.

Polish Foreign Minister Radoslaw Sikorski has warned that Russia could launch an invasion if Ukrainian forces continue to have success in their fight against the rebels.

Traders also expressed concerns about the outlook for monetary policy following the release of a report showing an unexpectedly narrower U.S. trade deficit.

The Commerce Department report said the U.S. trade deficit narrowed to $41.5 billion in June from a revised $44.7 billion in May. The deficit had been expected to widen to $45.0 billion.

Economists noted that the unexpectedly narrower trade deficit could lead to an upward revision to the pace of GDP growth reported for the second quarter.

However, traders seemed somewhat reluctant to continue selling stocks following the sharp drop seen over the past few sessions.

Bargain hunting contributed to the subsequent recovery by the markets, with the S&P 500 rebounding from a two-month intraday low.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Gold stocks saw considerable strength on the day, however, with the NYSE Arca Gold Bugs Index surging up by 2.3 percent. Despite the strong gain, the index remains stuck in a recent trading range.

The strength among gold stocks came amid a sharp increase by the price of the precious metal, as gold for December delivery jumped $22.90 to $1,307.40 an ounce.

On the other hand, utilities stocks saw considerable weakness, extending a recent downward trend. The Dow Jones Utilities Average fell by 1.1 percent to a four-month closing low.

Telecom and trucking stocks also saw some weakness on the day, with Sprint (S) leading the telecom sector lower on news that it has ended talks to acquire T-Mobile (TMUS).

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the downside during trading on Wednesday. Japan's Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets also ended the day in the red. While the French CAC 40 Index dropped by 0.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index both slid by 0.7 percent.

In the bond market, treasuries closed slightly higher but well off their best levels of the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.474 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to monetary policy announcements from Europe and the U.K. as well as a report on U.S. jobless claims.

On the earnings front, Wendy's (WEN), Orbitz (OWW), Intercontinental Exchange (ICE), and Duke Energy (DUK) are among the companies due to release their quarterly results before the start of trading on Thursday.