Stocks Showing A Lack Of Direction - U.S. Commentary

(RTTNews) - Following the downturn seen over the course of the previous session, stocks have shown a lack of direction during trading on Tuesday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains. The Dow is up 61.36 points or 0.3 percent at 18,099.33, the Nasdaq is up 10.70 points or 0.2 percent at 5,070.94 and the S&P 500 is up 4.48 points or 0.2 percent at 2,113.40.

The choppy trading on Wall Street is partly due to conflicting reports regarding Iranian forces seizing a cargo ship traveling through the Strait of Hormuz.

Initial reports indicated the vessel was a U.S. cargo ship, but Pentagon officials denied the reports and said the ship was flagged to the Marshall Islands.

Officials said a U.S. Navy destroyer has nonetheless been ordered to the region to keep an eye on the situation. U.S. Navy planes are also monitoring the area.

Uncertainty about the Federal Reserve's monetary policy announcement is also contributing to the lackluster performance by stocks.

While the Fed is widely expected to keep interest rates unchanged, traders will be paying close attention to any hints regarding the outlook for rates.

Several recent economic reports have shown signs of weakness, leading many analysts to predict the Fed will delay its first rate hike until later in the year.

The Conference Board released a report this morning showing an unexpected pullback in U.S. consumer confidence in the month of April.

The report said the consumer confidence index tumbled to 95.2 in April from an upwardly revised 101.4 in March, while economists had expected the index to climb to a reading of 102.5.

Sector News

Despite the lack of direction being shown by the broader markets, gold have stocks have seen substantial strength throughout the session. The NYSE Arca Gold Bugs Index has surged up by 3.5 percent, reaching its best intraday level in almost two months.

The strength among gold stocks comes amid a continued increase by the price of the precious metal, with gold for June delivery climbing $8.80 to $1,212 an ounce after jumping by $28.20 an ounce on Monday.

Significant strength has also emerged among software stocks, as reflected by the 1.2 percent gain being posted by the Dow Jones Software Index. With the gain, the index has reached its best intraday level in almost fifteen years.

On the other hand, considerable weakness remains visible in the trucking sector, resulting in a 1.5 percent drop by the Dow Jones Trucking Index. C.H. Robinson (CHRW) is posting a steep loss after reporting weaker than expected first quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index tumbled by 1.1 percent.

Meanwhile, the major European markets all came under pressure on the day. While the U.K.'s FTSE 100 Index slumped by 1 percent, the French CAC 40 Index and the German DAX Index plunged by 1.8 percent and 1.9 percent, respectively.

In the bond market, treasuries have moved to the downside after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 1.961 percent.