Stocks Showing A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - With traders seemingly reluctant to make any significant moves, stocks are turning in a lackluster performance in early trading on Tuesday. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 1.36 points or less than 0.1 percent at 5,028.61, the Dow is up 22.15 points or 0.1 percent at 17,813.32 and the S&P 500 is up 0.76 points or less than 0.1 percent at 2,085.19.

The choppy trading on Wall Street comes as many traders are staying on the sidelines ahead of the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed is not expected to announce an increase in interest rates due to some recent signs of economic sluggishness, but traders will be paying close attention to any hints regarding the timing of the first rate hike.

The monetary policy statement will be accompanied by a press conference by Fed Chair Janet Yellen as well as the central bank's latest forecasts.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing a bigger than expected pullback in housing starts in the month of May.

The Commerce Department said housing starts tumbled 11.1 percent to an annual rate of 1.036 million in May after jumping 22.1 percent to a seven-year high of 1.165 million in April. Economists had expected starts to drop to an annual rate of 1.090 million.

Meanwhile, the report also said building permits, an indicator of future housing demand, jumped 11.8 percent to an annual rate of 1.275 million in May from the revised April rate of 1.140 million.

The increase in building permits came as a surprise to economists, who had expected permits to drop to a rate of 1.105 million.

"Permits were unexpectedly strong in May," said Jennifer Lee, senior economist at BMO Capital. "That alone points to stronger residential construction activity ahead."

Most of the major sectors are showing only modest moves, contributing to the lack of direction being shown by the broader markets.

Gold stocks are seeing significant weakness, however, with the NYSE Arca Gold Bugs Index falling by 1.5 percent. The weakness in the sector comes as the price of gold for August delivery is sliding $8.80 to $1,177 an ounce.

In overseas trading, stock markets across the Asia-Pacific region once again moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slumped by 0.6 percent, while Hong Kong's Hang Seng Index tumbled by 1.1 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index is down by 0.2 percent, the German DAX Index and the French CAC 40 Index are up by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries are seeing modest strength, extending their recent recovery. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.347 percent.