Stocks Continue To Experience Choppy Trading - U.S. Commentary

(RTTNews) - Stocks continue to show a lack of direction in mid-day trading on Wednesday, extending the lackluster performance seen in the previous session. The major averages continue to linger near the unchanged line after ending Tuesday's trading roughly flat.

Currently, the major averages are posting modest losses. The Dow is down 19.01 points or 0.1 percent at 18,293.38, the Nasdaq is down 2.81 points or 0.1 percent at 5,067.22 and the S&P 500 is down 2.41 points or 0.1 percent at 2,125.42.

The choppy trading on Wall Street comes as traders are staying on the sidelines ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting.

The minutes, which are not due to be released until late in the trading day, could shed some light on the outlook for interest rates.

Following the April meeting, the Fed left interest rates unchanged as was widely expected and acknowledged that economic growth slowed during the winter months.

Traders seemed disappointed the central bank did not provide any specific guidance about the timing of the first interest rate hike.

While the minutes are still likely to attract attention, analysts have noted that several disappointing economic reports released since the meeting have likely impacted the outlook for rates.

Traders may also be looking ahead to the release of reports on weekly jobless claims, existing home sales, and consumer price inflation in the coming days.

Another mixed batch of earnings news from the retail sector may also be contributing to the continued choppy trading on Wall Street.

Shares of Lowe's (LOW) have fallen sharply on the day after the home improvement retailer reported weaker than expected first quarter results.

Office supplies retailer Staples (SPLS) has also come under pressure after reporting first quarter earnings that met Wall Street estimates but on revenues that came in below expectations.

Meanwhile, shares of Target (TGT) have moved to the upside after the discount retailer reported better than expected first quarter earnings and raised the low end of its full-year earnings guidance.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lack of direction being shown by the broader markets.

Airline stocks continue to see substantial weakness, however, with the NYSE Arca Airline Index plunging by 4/2 percent. With the drop, the index has fallen to a five-month intraday low.

The sell-off by airline stocks is partly due to concerns about lower fares and airline revenue after Southwest Airlines (LUV) said it is speeding up its planned growth.

Trucking and railroad stocks have also moved to the downside, reflecting weakness in the broader transportation sector. The Dow Jones Transportation Average is down by 1.7 percent after hitting its worst levels in almost seven months.

On the other hand, tobacco stocks have shown a strong move to the upside on the day, driving the NYSE Arca Tobacco Index up by 1.1 percent. Universal Corp. (UVV) is posting a standout gain after reporting its fourth quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

The major European markets also ended the day mixed. While the German DAX Index edged down by less than a tenth of a percent, the U.K.'s FTSE 100 Index crept up by 0.2 percent and the French CAC 40 Index rose by 0.3 percent.

In the bond market, treasuries are lingering near the unchanged line ahead of the release of the Fed minutes. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.26 percent.