Stocks Close Modestly Lower Following Lackluster Session - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading day on Tuesday before ending the session modestly lower. The losses on the day partly offset the notable upward move that was seen in the previous session.

The major averages moved roughly sideways going into the close, stuck just below the unchanged line. The Dow dipped 27.48 points or 0.2 percent to 16,179.66, the Nasdaq edged down 5.38 points or 0.1 percent to 4,287.59 and the S&P 500 slipped 2.49 points or 0.1 percent to 1,845.12.

The lackluster performance seen for most of the session came as traders seemed reluctant to make any significant moves following yesterday's gains.

The tech-heavy Nasdaq ended Monday's trading at its best closing level in almost fourteen years, while the S&P 500 reached a record intraday high before pulling back going into the close.

Traders may also have been looking ahead to the release of some key economic data later in the week, including reports on new home sales and durable goods orders.

Additionally, Federal Reserve Chair Janet Yellen is scheduled to testify before the Senate Banking Committee on Thursday after her originally scheduled appearance before the committee was postponed due to a snowstorm in Washington.

The markets largely shrugged off a report released by the Conference Board this morning showing that U.S. consumer confidence has deteriorated by more than expected in February amid concerns about the short-term outlook.

The Conference Board said its consumer confidence index fell to 78.1 in February from a downwardly revised 79.4 in January. Economists had been expecting the index to edge down to 80.1 from the 80.7 originally reported for the previous month.

Standard & Poor's released a separate report before the start of trading showing that home prices in major U.S. metropolitan areas rose by more than expected in the month of December.

Among individual stocks, shares of InterMune (ITMN) shot up by more than 170 percent after the biotech company said its lung disease drug Esbriet met its goals in a late-stage clinical trial.

Home improvement retailer Home Depot (HD) also moved higher on the day after reporting fourth quarter earnings that exceeded analyst estimates. The company also announced a 21 percent increase in its quarterly dividend.

On the other hand, shares of Tenet Healthcare (THC) came under pressure after the hospital operator reported a fourth quarter net loss.

Sector News

Steel stocks saw considerable weakness on the day amid concerns about the outlook for the Chinese economy. The NYSE Arca Steel Index tumbled by 2.1 percent, extending a recent pullback.

A.M. Castle (CAS) turned in one of the steel sector's worst performances, falling by 5.7 percent after reporting disappointing fourth quarter results.

Significant weakness was also visible among gold stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca Gold Bugs Index. The weakness in the sector came despite an increase by the price of gold.

Brokerage, defense, and computer hardware stocks also saw some weakness on the day, while retail and airline stocks moved to the upside.

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 surged up by 1.4 percent, while China's Shanghai Composite Index tumbled by 2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index dropped by 0.5 percent, the German DAX Index and the French CAC 40 Index both edged down by 0.1 percent.

In the bond market, treasuries moved notably higher, more than offsetting the modest weakness in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.9 basis points to 2.701 percent.

Looking Ahead

Economic data may attract some attention on Wednesday, with the Commerce Department scheduled to release its monthly report on new home sales.

Trading could also be impacted by reaction to quarterly results from companies such as Anheuser-Busch InBev (BUD), Lowe's (LOW), and Target (TGT).