Stocks Move Modestly Higher After Seeing Initial Weakness - U.S. Commentary

(RTTNews) - After seeing initial weakness, stocks have moved modestly higher over the course of morning trading on Wednesday. The major averages have all climbed into positive territory, although buying interest has remained somewhat subdued.

Currently, the major averages are holding on to slim gains. The Dow is up 22.87 points or 0.1 percent at 18,336.64, the Nasdaq is up 5.50 points or 0.1 percent at 5,143.24 and the S&P 500 is up 2.38 points or 0.1 percent at 2,159.41.

The relatively choppy trading seen on Wall Street comes following the release of a mixed batch of U.S. economic data.

While payroll processor ADP released a report showing stronger than expected private sector job growth, a report from the Institute for Supply Management showed a slowdown in service sector growth.

ADP said private sector employment increased by 179,000 jobs in July after climbing by an upwardly revised 176,000 jobs in June.

Economists had expected employment to grow by about 170,000 jobs compared to the addition of 172,000 jobs originally reported for the previous month.

Meanwhile, the ISM said its non-manufacturing index declined to 55.5 in July after jumping to a seven-month high of 56.5 in June.

While a reading above 50 indicates continued growth in the service sector, economists had expected the index to show a more modest drop to 56.0.

Traders may also be looking ahead to the Bank of England's monetary policy announcement on Thursday as well as the release of the U.S. Labor Department's monthly jobs report on Friday.

After moving notably lower over the past few sessions, brokerage stocks have shown a strong move back to the upside. Reflecting the rebound by the sector, the NYSE Arca Broker/Dealer Index is climbing 1.4 percent.

Stifel Financial (SF) has helped to lead the brokerage sector higher after reporting second quarter earnings that exceeded analyst estimates.

Energy stocks are also seeing some strength on the day as the price of crude oil for September delivery is advancing $0.59 to $40.10 a barrel.

Oh the other hand, gold stocks are giving back ground following recent strength, with the NYSE Arca Gold Bugs Index sliding 1.4 percent after ending Tuesday's trading at a three-year closing high.

The pullback by gold stocks comes amid a decrease by the price of the precious metal, as gold for December delivery is falling $10.20 to $1,362.40 an ounce.

In overseas trading, most stock markets across the Asia-Pacific region moved notably lower during trading on Wednesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index tumbled by 1.9 percent and 1.8 percent, respectively.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has risen by 0.4 percent, the U.K.'s FTSE 100 Index is nearly unchanged and the French CAC 40 Index is down by 0.1 percent.

In the bond market, treasuries are extending the pullback seen over the course of the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 1.570.