Major Averages Close Mixed Following Recent Volatility - U.S. Commentary

(RTTNews) - Following the substantial volatility seen over the past few sessions, stocks turned in a relatively lackluster performance during trading on Wednesday. The major averages moved to the upside early in the session but showed a lack of direction as the day progressed.

The major averages eventually closed on opposite sides of the unchanged line. While the Nasdaq rose 18.52 points or 0.4 percent to 5,173.77, the Dow slipped 31.98 points or 0.2 percent to 18.034.77 and the S&P 600 edged down 1.25 points or 0.1 percent to 2,125.77.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves following the wild swings seen in recent days.

The steep loss posted on Tuesday largely offset the recovery rally seen on Monday, which came on the heels of the sell-off seen last Friday.

Traders may also have been content to stick to the sidelines ahead to the release of a slew of U.S. economic data on Thursday.

Reports on weekly jobless claims, producer prices, retail sales, industrial production, and regional manufacturing activity could all impact tomorrow's trading.

The data is likely to be closely analyzed for how it could impact the Federal Reserve's monetary policy decision scheduled for next week.

While recent disappointing economic data has led many analysts to predict that the Fed will leave interest rates unchanged, a few central bank officials have made hawkish comments.

The Fed is scheduled to hold a two-day meeting starting next Tuesday and announce its policy decision next Wednesday afternoon.

The central bank is also due to reveal its updated economic forecasts followed by a press conference by Fed Chair Janet Yellen.

Sector News

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

Energy stocks saw considerable weakness, however, moving lower along with the price of crude oil. Crude for October delivery slumped $1.32 to $43.58 a barrel following the release of a report showing weekly increases in inventories of distillate fuel and gasoline.

Reflecting the weakness in the energy sector, the NYSE Arca Oil & Gas Index and the NYSE Arca Natural Gas Index both dropped by 1.5 percent.

On the other hand, biotechnology stocks showed a significant move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 1.3 percent. Myriad Genetics (MYGN), Seattle Genetics (SGEN), and Novavax (NVAX) posted notable gains.

Considerable strength was also visible among electronic storage stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Disk Drive Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.7 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index dipped by 0.1 percent and the French CAC 40 Index dropped by 0.4 percent.

In the bond market, treasuries regained ground following the notable decline seen on Tuesday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.5 basis points to 1.689 percent.

Looking Ahead

The large batch of economic reports is likely to be in focus on Thursday, although the sheer volume of data may lead to a mixed reaction.