Stocks Continue To Show A Lack Of Direction In Mid-Day Trading - U.S. Commentary

(RTTNews) - With traders moving to the sidelines following the volatility seen over the past two sessions, stocks continue to show a lack of direction in mid-day trading on Wednesday. The major averages have spent the day lingering near the unchanged line.

Currently, the major averages are turning in a mixed performance, with the Dow posting a modest loss. While the Dow is down 24.78 points or 0.2 percent at 16,371.10, the Nasdaq is up 4.67 points or 0.1 percent at 4,356.64 and the S&P 500 is up 1.15 points or 0.1 percent at 1,875.06.

The lackluster performance on Wall Street comes as traders seem reluctant to make any significant moves after the markets saw big swings in response to the developments in Ukraine.

Uncertainty about the near-term outlook for the markets ahead of Friday's monthly jobs report is also contributing to the choppy trading.

Meanwhile, traders have shrugged off disappointing reports on private sector employment and service sector activity due to the apparent impact of the winter weather.

Payroll processor ADP released a report before the start of trading showing that private sector employment rose by less than expected in the month of February.

ADP said the private sector added 139,000 jobs in February compared to economist estimates for an increase of about 155,000 jobs. The report also showed a downward revision to the job growth in the previous month.

Mark Zandi, chief economist of Moody's Analytics, noted that the bad winter weather weighed on payrolls but said job growth is expected to improve with warmer temperatures.

The Institute for Supply Management released a separate report showing that activity in the service sector grew at a slower rate in the month of February.

The ISM said its non-manufacturing index fell to 51.6 in February from 54.0 in January, although a reading above 50 indicates continued growth in the service sector. Economists had been expecting the index to edge down to 53.5.

Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said some of the respondents attributed the slowdown to the rough winter weather.

Sector News

While most of the major sectors are showing only modest moves, notable strength has emerged among networking stocks. The NYSE Arca Networking Index has risen by 1.1 percent and is on pace to end the session at a twelve-year closing high.

Infinera (INFN) and Emulex (ELX) are turning in two of the networking sector's best performances, advancing by 1.7 percent and 1.9 percent, respectively.

Banking stocks have also moved to the upside on the day, resulting in a 1.1 percent gain by the Dow Jones Banks Index. Bank of America (BAC) has helped to lead the sector higher.

Gold and railroad stocks are also seeing some strength in mid-day trading, while weakness is visible among commercial real estate and housing stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan's Nikkei 225 surged up by 1.2 percent, while Australia's All Ordinaries Index advanced by 0.8 percent. However, the Hong Kong and Chinese markets bucked the uptrend.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index fell by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries have turned slightly higher on the day after moving lower in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.685 percent.