Stocks Close Narrowly Mixed Following Lackluster Session - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading session on Tuesday after failing to sustain an early move to the upside. The major averages spent much of the day on opposite sides of the unchanged line before ending the session mixed.

While the Dow edged up 22.19 points or 0.1 percent to a new record closing high of 15,567.74, the Nasdaq dropped 21.11 points or 0.6 percent to 3,579.27 and the S&P 500 dipped 3.14 points or 0.2 percent to 1,692.39.

The initial strength on Wall Street was partly due to a positive reaction to the latest batch of earnings news, although buying interest waned not long after the open.

Despite the subsequent pullback by the broader markets, Dow component United Technologies (UTX) held on to a strong gain, helping to keep the blue chip index in positive territory.

Shares of United Technologies rose by 3 percent after the diversified manufacturer reported stronger than expected second quarter earnings and raised its full-year guidance.

Meanwhile, DuPont (DD) ended the session modestly lower after showing a strong move to the upside at the start of trading.

Before the start of trading, DuPont reported second quarter operating earnings that came in a penny above analyst estimates and announced that it is exploring strategic alternatives for its performance chemicals segment.

Fellow Dow component Travelers (TRV) came under pressure on the day even though the insurance giant reported second quarter earnings that came in well above expectations.

Electronic retailer RadioShack (RSH) also showed a notable move to the downside after reporting a wider than expected second quarter loss despite better than expected revenues.

A disappointing reading on regional manufacturing activity from the Richmond Federal Reserve may have helped to offset the early buying interest.

The Richmond Fed said its index of regional manufacturing activity fell to a negative 11 in July from a positive 9 in June, with a negative reading indicating a contraction.

Negative sentiment may also have been generated by the results of a Bloomberg News survey showing that a growing number of economists expect the Fed to trim its monthly bond buying to $65 billion in September from the current pace of $85 billion.

Sector News

While many of the major sectors ended the day showing only modest moves, considerable weakness was visible among biotechnology stocks. Reflecting the weakness in the biotechnology sector, the NYSE Arca Biotechnology Index fell by 2.1 percent.

Affymetrix (AFFX) helped to lead the biotech sector lower, falling by 5.2 percent, while Biogen Idec (BIIB) and Regeneron (REGN) also posted notable losses.

Tobacco stocks also came under pressure on the day, dragging the NYSE Arca Tobacco Index down by 1.5 percent. The loss by the index came after it ended the previous session at a record closing high.

Trucking and electronic storage stocks also saw significant weakness, with the Dow Jones Trucking Index and the NYSE Arca Disk Drive Index falling by 1.3 percent and 1.1 percent, respectively.

Meanwhile, gold stocks showed a substantial turnaround after coming under pressure in early trading. The NYSE Arca Gold Bugs Index surged up by 2.9 percent, reaching its best closing level in over a month.

Steel stocks also ended the day posting strong gains, resulting in a 2.2 percent advance by the NYSE Arca Steel Index, which reached a nearly two-month closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 2.3 percent.

Meanwhile, the major European markets turned lower over the course of the session. While the German DAX Index edged down by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both fell by 0.4 percent.

In the bond market, treasuries closed modestly lower, giving back some ground after trending higher in recent weeks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 2.516 percent.

Looking Ahead

Reaction to earnings news from Apple (AAPL) may drive trading on Wednesday, with the tech giant releasing its quarterly results after the close of today's trading.

Traders are also likely to keep an eye on the Commerce Department's monthly report on new home sales. Economists expect new home sales to climb to an annual rate of 481,000 in June.