Stocks Nearly Flat Amid Focus On Yellen Remarks - U.S. Commentary

(RTTNews) - After initially moving to the upside, stocks have shown a lack of direction over the course of the trading session on Tuesday. The lackluster performance comes as traders are keeping an eye on remarks by Federal Reserve Chair Janet Yellen.

Currently, the major averages are on opposite sides of the unchanged line. While the Nasdaq is down 2.53 points or 0.1 percent at 4,834.68, the Dow is up 16.16 points or 0.1 percent at 17,821.03 and the S&P 500 is up 3.41 points or 0.2 percent at 2,086.66.

Traders remain somewhat reluctant to make any significant moves as Yellen delivers her semi-annual testimony before the Senate Banking Committee.

In her prepared remarks, Yellen said a cautious approach on interest rates remains appropriate amid considerable uncertainty about the economic outlook.

"Proceeding cautiously in raising the federal funds rate will allow us to keep the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress," she said.

Yellen suggested that the Fed will need to see an improvement in the labor market before considering another rate hike.

The Fed chief also warned that Thursday's referendum on whether Britain will remain in the European Union could have "significant economic repercussions."

A poll conducted by ORB for the Daily Telegraph found that 53 percent of British voters support remaining in the EU compared to 46 percent that prefer to leave.

However, a separate poll conducted by YouGov for the Times showed voters split 44 percent to 42 percent in favor of the so-called Brexit, with a significant 9 percent undecided.

Among individual stocks, shares of Impax Laboratories (IPXL) have fallen sharply after the drug company agreed to acquire a portfolio of generic products from Teva (TEVA) and Allergan (AGN) for $586 million.

Trucking company Werner Enterprises (WERN) has also come under pressure after providing disappointing second quarter guidance.

On the other hand, United Continental (UAL) is turning in a strong performance after the airline said initiatives it is currently implementing are expected to drive more than $3 billion in incremental value by 2018.

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.

Steel stocks are seeing substantial weakness, however, with the NYSE Arca Steel Index slumping by 2.2 percent. The pullback by the index comes after it moved notably higher over the four previous sessions.

Schnitzer Steel (SCHN) and U.S. Steel (X) are posting notable losses in mid-day trading, tumbling by 7.1 percent and 6.2 percent, respectively.

Considerable weakness has also emerged among biotechnology stocks, as reflected by the 1.8 percent drop by the NYSE Arca Biotechnology Index. The index has fallen to its lowers intraday level in a month.

Gold stocks have also come under pressure, moving lower along with the price of the precious metal. With gold for August delivery falling $18.60 to $1,273.50 an ounce, the NYSE Arca Gold Bugs Index is down by 1.5 percent.

On the other hand, software stocks have moved to the upside, driving the Dow Jones Software Index up by 1.1 percent. Industry giant Microsoft (MSFT) has helped lead the way higher, jumping by 2.1 percent.

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 surged up by 1.3 percent, while China's Shanghai Composite Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index and the French CAC 40 Index advanced by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries have moved modestly lower as the trading session has progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 1687 percent.