Stocks Recover From Early Lows But Still Close In The Red - U.S. Commentary

(RTTNews) - After recovering from an initial move to the downside, stocks showed a lack of direction throughout much of the trading session on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day modestly lower. The Dow dipped 28.43 points or 0.2 percent to 18,011.94, the Nasdaq edged down 6.40 points or 0.1 percent to 5,076.52 and the S&P 500 slipped 2.13 points or 0.1 percent to 2,109.60.

The initial weakness on Wall Street was partly due to continued concerns about Greece and the possibility of a default by the debt-ridden nation.

The major averages did not see much follow through on the early drop, however, as traders seemed reluctant to make significant moves ahead of the release of some key economic data in the coming days.

Reports on private sector employment, international trade and service sector activity are likely to be in focus on Wednesday along with the Federal Reserve's Beige Book report.

Weekly jobless claims and labor productivity data is also due to be released on Thursday, although the focus is likely to remain on the monthly jobs report due on Friday.

Economists currently expect the Labor Department report to show an increase of about 220,000 jobs in May, while the unemployment rate is expected to hold at 5.4 percent.

The subsequent recovery by the markets may partly have reflected comments by Federal Reserve Governor Lael Brainard.

Brainard said the Fed's first interest rate hike could come before the end of the year but said the case for liftoff is not imminent amid signs of continued economic weakness in the second quarter.

Among individual stocks, shares of PVH Corp. (PVH) moved sharply higher on the day after the apparel maker reported better than expected first quarter results and raised its full year guidance. The company also announced a $500 million stock buyback.

Restaurant and retail store chain Cracker Barrel (CBRL) also turned in a strong performance after the company beat third quarter earnings estimates, raised its quarterly dividend and declared a special dividend of $3 per share.

On the other hand, shares of Intel (INTC) came under pressure on the day after BMO Capital downgraded its rating on the semiconductor giant to Market Perform from Outperform.

Sector News

Despite the volatility shown by the broader markets, utilities stocks saw considerable weakness throughout the session. Reflecting the weakness in the sector, the Dow Jones Utilities Average slumped by 1.3 percent.

CenterPoint Energy (CNP) and Edison International (EIX) turned in two of the utilities sector's worst performances on the day.

Semiconductor stocks also saw notable weakness, resulting in a 1.2 percent drop by the Philadelphia Semiconductor Index. The pullback by the index came after it ended the previous session at a fourteen-year closing high.

Meanwhile, steel stocks showed a substantial move to the upside on the day, driving the NYSE Arca Steel Index up by 4.1 percent. The index rebounded after ending Monday's trading at its worst closing level in over a month.

Oil service and gold stocks also saw considerable strength on the day, moving higher along with the prices of their associated commodities.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index fell by 0.5 percent.

The major European markets also moved to the downside over the course of the session. While the German DAX Index slid by 0.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both dropped by 0.4 percent.

In the bond market, treasuries moved notably lower on the day, extending the sharp pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged up 7.4 basis points to 2.266 percent.

Looking Ahead

While the latest economic data may attract some attention on Wednesday, traders may continue to look ahead to Friday's monthly jobs report.