Major Averages Close Mixed Following Lackluster Session - U.S. Commentary

(RTTNews) - Following the strength seen in the previous session, stocks turned in a lackluster performance during trading on Wednesday. The major averages eventually finished the day on opposite sides of the unchanged line.

While the Dow edged down 42.18 points or 0.2 percent to 20,659.32, the Nasdaq rose 22.41 points or 0.4 percent to 5,897.55 and the S&P 500 inched up 2.56 points or 0.1 percent to 2,361.13.

The choppy trading on Wall Street came as traders seemed reluctant to make any significant moves amid continued uncertainty about President Donald Trump's policy agenda following the failure of the Republican health care bill.

Developments in the U.K. were also in focus after the British government sent a notification letter to European Council President Donald Tusk formally beginning the country's exit from the European Union.

The move to trigger the Article 50 process to leave the EU comes after Britons voted last June in favor of the so-called Brexit.

"This is an historic moment, from which there can be no turning back. Britain is leaving the European Union," said British Prime Minister Theresa May. "We are going to make our own decisions and our own laws. We are going to take control of the things that matter most to us."

"And we are going to take this opportunity to build a stronger, fairer Britain — a country that our children and grandchildren are proud to call home," she added. "That is our ambition and our opportunity, and that is what this government is determined to do."

On the U.S. economic front, the National Association of Realtors released a report showing that pending home sales rebounded by much more than expected in the month of February.

NAR said its pending home sales index spiked by 5.5 percent to 112.3 in February from 106.4 in January. Economists had expected pending home sales to jump by 2.4 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the bigger than expected increase, the index surged up to its highest level since reaching 113.6 last April and is at its second highest level since May of 2006.

Sector News

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

Energy stocks saw considerable strength, however, with an increase by the price of crude oil generating buying interest. Crude for May delivery jumped $1.14 to $49.51 a barrel.

The increase by the price of crude oil came following the release of a report from the Energy Information Administration showing a smaller than expected weekly increase in crude oil inventories.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index surged up by 2.4 percent, the Philadelphia Oil Service Index jumped by 2.1 percent, and the NYSE Arca Oil & Gas Index advanced by 1.3 percent.

After initially showing a lack of direction, gold stocks also moved higher over the course of the trading session. The NYSE Arca Gold Bugs Index climbed by 1.2 percent.

The gains by gold stocks came despite a decrease by the price of the precious metal, as gold for April delivery fell $1.90 to $1,253.70 an ounce.

Computer hardware, biotechnology and retail stocks also saw notable strength on the day, while weakness was visible among airline stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index crept up by 0.1 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index advanced by 0.5 percent, the German DAX Index and the U.K.'s FTSE 100 Index both rose by 0.4 percent.

In the bond market, treasuries regained some ground following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.3 basis points to 2.386 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and fourth quarter GDP along with speeches by several Federal Reserve officials.