Stocks Close Mixed But Nasdaq Reaches New Record High - U.S. Commentary

(RTTNews) - After seeing modest strength early in the session, stocks turned mixed over the course of the trading day on Tuesday. While the Dow and the S&P 500 pulled back into negative territory, the tech-heavy Nasdaq reached a new record closing high.

The Nasdaq rose 17.93 points or 0.3 percent to 6,120.59, but the Dow dipped 36.50 points or 0.2 percent to 20,975.78 and the S&P 500 edged down 2.46 points or 0.1 percent to 2,396.92.

The mixed close on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of key reports on retail sales and producer and consumer prices later this week.

Early in the session, some buying interest was generated in reaction to upbeat earnings news, with Marriott (MAR) and Office Depot (ODP) moving notably higher after reporting better than expected quarterly earnings.

Traders also kept an eye on comments from Federal Reserve officials, with Boston Fed President Eric Rosengren suggesting the central bank could be forced to raise interest rates at a faster pace if unemployment drops below 4 percent.

"Such an overheated economy would likely be accompanied by higher inflation, which in turn would likely elicit higher interest rates," Rosengren said.

On the U.S. economic front, the Commerce Department released a report showing an unexpected increase in wholesale inventories in the month of March.

The report said wholesale inventories rose by 0.2 percent in March after climbing by 0.3 percent in February. Inventories had been expected to edge down by 0.1 percent.

Among individual stocks, shares of Wayfair (W) moved sharply higher after the online home furnishings retailer reported a narrower than expected first quarter loss on revenues that exceeded estimates.

Drug maker Valeant Pharmaceuticals (VRX) also posted a substantial gain after reporting better than expected first quarter earnings and raising its full-year guidance.

On the other hand, shares of Hertz Global (HTZ) showed a steep drop after the car rental company reported a wider than expected first quarter loss on revenues that came in below estimates.

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, with a drop by the price of crude oil weighing on the sector. Crude for June delivery slid $0.55 to $45.88 a barrel.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index dropped by 1.3 percent and 1 percent, respectively.

On the other hand, biotechnology stocks showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.3 percent.

Within the biotech sector, Endo International (ENDP) posted a standout gain after reporting better than expected first quarter earnings.

Semiconductor and networking stocks also saw some strength on the day, contributing to the higher close by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.3 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.6 percent, the German DAX Index and the French CAC 40 Index climbed by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries came under pressure, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.1 basis points to 2.407 percent.

Looking Ahead

Earnings news may attract attention on Wednesday, with Disney (DIS), News Corp. (NWSA), and Discovery Communications (DISCA) among the companies releasing their quarterly results after the close of today's trading.

Crocs (CROX), Mylan (MYL), SodaStream (SODA), Toyota (TM), and Wendy's (WEN) are also due to report their results before the start of trading on Wednesday.

In economic news, the Labor Department is scheduled to release a report on import and export prices in the month of April.