U.S. Stocks Continue To Show A Lack Of Direction

After showing a lack of direction early in the session, stocks continue to turn in a lackluster performance in mid-day trading on Wednesday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are all slightly lower. The Dow is down 44.35 points or 0.1 percent at 35,298.93, the Nasdaq is down 4.43 points or less than a tenth of a percent at 14,651.75 and the S&P 500 is down 5.90 points or 0.1 percent at 4,442.18.

The choppy trading on Wall Street comes as traders look ahead to this afternoon’s release of the minutes of the Federal Reserve’s latest monetary policy meeting.

Traders are likely to closely examine the minutes of the Fed’s July meeting for clues about the outlook for monetary policy.

Concerns about the economic outlook weighed on the markets on Tuesday, but traders have largely been able to shrug off economic worries amid optimism that the Fed will maintain its asset purchase program for the foreseeable future.

Any indications from the Fed minutes that the central bank is considering tapering its asset purchases could have a significant impact on the markets.

On the U.S. economic front, the Commerce Department released a report this morning showing a sharp pullback in new residential construction in the U.S. in the month of July.

The Commerce Department said housing starts plunged by 7.0 percent to an annual rate of 1.534 million in July after jumping by 3.5 percent to a revised rate of 1.650 million in June.

Economists had expected housing starts to slump by 2.6 percent to a rate of 1.600 million from the 1.643 million originally reported for the previous month.

Meanwhile, the report said building permits shot up by 2.6 percent to an annual rate of 1.635 million in July after tumbling by 5.3 percent to a revised rate of 1.594 million in June.

Building permits, an indicator of future housing demand, had been expected to climb by 0.8 percent to a rate of 1.610 million from the 1.598 million originally reported for the previous month.

Sector News

Most of the major sectors continue to show only modest moves in mid-day trading, although substantial weakness remains visible among gold stocks.

Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index has plunged by 2.6 percent to its lowest intraday level in well over a year.

The sell-off by gold stocks comes amid a modest decrease by the price of the precious metal, with gold for December delivery slipping $3.30 to $1,784.50 an ounce.

Interest rate-sensitive commercial real estate and utilities stocks are also seeing some weakness ahead of the release of the Fed minutes.

On the other hand, oil service stocks have shown a strong move to the upside on the day, driving the Philadelphia Oil Service Index up by 1.1 percent.

The strength among oil service stocks comes despite a decrease by the price of crude oil, as crude for September delivery is falling $0.44 to $66.15 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index jumped by 1.1 percent.

Meanwhile, the major European markets turned in another mixed performance on the day. While the German DAX Index rose by 0.3 percent, the U.K.’s FTSE 100 Index edged down by 0.2 percent and the French CAC 40 Index slid by 0.7 percent.

In the bond market, treasuries are seeing modest weakness after ending the previous session nearly unchanged. 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 1.275 percent.

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