Major Averages Remain Mixed In Mid-Day Trading - U.S. Commentary

(RTTNews) - After ending the previous session on opposite sides of the unchanged line, the major averages are once again turning in a mixed performance during trading on Tuesday. While the Nasdaq and the S&P 500 have moved higher, the Dow is pulling back off Monday's record closing high.

Currently, the Dow is down 52.08 points or 0.3 percent at 18,816.61, while the Nasdaq is up 43.07 points or 0.8 percent at 5,261.46 and the S&P 500 is up 6.38 points or 0.3 percent at 2,170.58.

Some buying interest has been generated in reaction to a report from the Commerce Department showing that retail sales increased by more than expected in the month of October.

The report said retail sales climbed by 0.8 percent in October after jumping by an upwardly revised 1.0 percent in September. Economists expected sales to rise by 0.6 percent, matching the increase originally reported for the previous month.

Excluding an increase in auto sales, retail sales still climbed by 0.8 percent in October following a 0.7 percent increase in September. Ex-auto sales had been expected to rise by 0.5 percent.

Additionally, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food service, increased by 0.8 percent in October after rising by 0.3 percent in September.

"It hardly needs saying, but this report solidifies the Fed's case for a December rate hike," said Chris Low, chief economist at FTN Financial. "Just one report, November employment, might change their mind now barring a market meltdown."

Traders are also reacting to a sharp increase by the price of crude oil, with crude for December delivery jumping $1.92 to $45.24 a barrel.

The spike by the price of crude oil comes amid optimism that the members of OPEC will finalize an agreement on cutting production later this month.

Sector News

Energy stocks continue to see substantial strength in mid-day trading, benefiting from the sharp increase by the price of crude oil.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index is up by 4.5 percent, the Philadelphia Oil Service Index is up by 2.9 percent and the NYSE Arca Oil & Gas Index is up by 2 percent.

Significant strength is also visible among gold stocks, as reflected by the 2.4 percent gain being posted by the NYSE Arca Gold Bugs Index. The strength in the sector comes as gold for December delivery is rising $1.90 to $1,233.60 an ounce.

Semiconductor, internet and software stocks are also seeing considerable strength on the day, contributing to the advance by the tech-heavy Nasdaq.

Meanwhile, steel, railroad, and banking stocks are under pressure, giving back some ground after rallying in reaction to President-elect Donald Trump's surprise victory.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index climbed by 0.5 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.6 percent.

In the bond market, treasuries are showing a lack of direction after falling sharply in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.221 percent.