Stocks Close Slightly Higher Following Choppy Trading Day - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading day on Tuesday before ending the session slightly higher. The slim gains on the day lifted the Nasdaq to a new record closing high, while the S&P 500 reached its best closing level in a month.

The major averages finished the day just above the unchanged line. The Dow crept up 24.29 points or 0.1 percent to 18,144.07, the Nasdaq edged up 6.12 points or 0.1 percent to 5,160.09 and the S&P 500 inched up 1.35 points or 0.1 percent to 2,124.20.

The lackluster performance on Wall Street came as traders largely stayed on the sidelines following the upward move seen over the past week.

Optimism about the situation in Greece contributed to the recent strength, but traders seemed to be waiting for an actual agreement before doing much further buying.

Analysts at Bank of America Merrill Lynch said Greece's latest proposals go much further than expected but cautioned that substantial challenges remain, with Greek parliamentary approval seen as a key risk

Traders were also digesting the latest batch of U.S. economic data, including a report from the Commerce Department showing that new home sales climbed to a seven-year high in May.

The report said new home sales rose 2.2 percent to an annual rate of 546,000 in May after surging up 8.1 percent to the revised April rate of 534,000.

Economists had expected new home sales to rise to a rate of 525,000 from the 517,000 originally reported for the previous month, reflecting a 1.5 percent increase.

With the bigger than expected increase, new home sales reached their highest level since hitting a rate of 593,000 in February of 2008.

A separate Commerce Department report showed a bigger than expected drop in durable goods orders in May, although the decrease was largely due to weakness in the volatile transportation sector.

The report said durable goods orders tumbled by 1.8 percent in May following a revised 1.5 percent decrease in April. Economists had expected orders to dip by 0.6 percent.

However, excluding a steep drop in orders for transportation equipment, durable goods orders rose by 0.5 percent in May after falling by 0.3 percent in April. The increase matched economist estimates.

Sector News

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

Steel stocks showed a strong move to the upside over the course of the session, however, with the NYSE Arca Steel Index climbing by 1.1 percent. Olympic Steel (ZEUS) and Allegheny Technologies (ATI) turned in two of the sector's best performances.

Notable strength was also visible among energy stocks, which moved higher along with the price of crude oil. In its first day as the front-month contract, crude for August delivery climbed $0.63 to $61.01 a barrel.

On the other hand, utilities stocks saw considerable weakness throughout the day, dragging the Dow Jones Utilities Average down by 1.4 percent. NiSource (NI) and CenterPoint Energy (CNP) posted notable losses.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw continued strength during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.9 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets also saw further upside on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index climbed by 0.7 percent and the French CAC 40 Index jumped by 1.2 percent.

In the bond market, treasuries moved notably lower, extending the sharp pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.9 basis points to 2.409 percent.

Looking Ahead

The final report on first quarter GDP may attract some attention on Wednesday along with any developments regarding the negotiations between Greece and its creditors.