US stocks perform poorly as early buy interest fades

(RTTNews) – After failing to maintain an initial move higher, stocks showed lack of direction during Tuesday’s trading day. While the Dow Jones managed to stay in positive territory, the Nasdaq and the S&P 500 bounced off the unchanged line.

Currently, large averages are turning into mixed performance. The Nasdaq is down 21.81 points or 0.2% to 13,726.93, but the Dow Jones is up 126.04 points or 0.4% to 34,655.49 and the S&P 500 is up from 2.52 points or 0.1% to 4,206.63.

Wall Street’s initial strength came as bullish manufacturing data from overseas added to the optimism about the outlook for the global economy.

Data showed that Chinese manufacturing activity grew at a faster pace in May, while eurozone manufacturing activity grew at a record pace in May despite soft bottlenecks.

The Institute for Supply Management also released a report showing that manufacturing activity in the United States grew at a slightly faster pace in May.

The ISM said its manufacturing PMI climbed to 61.2 in May from 60.7 in April, with a reading above 50 indicating growth in manufacturing. The rise surprised economists, who expected the index to remain unchanged.

However, buyer interest weakened shortly after the start of trading, as traders continued to express uncertainty about inflation and the outlook for monetary policy.

Traders may also have been reluctant to take any significant action ahead of the release of the closely watched Labor Department’s monthly employment report on Friday.

Economists currently expect employment to jump 664,000 jobs in May after climbing 266,000 jobs in April. The unemployment rate is also expected to drop to 5.9% from 6.1%.

The Dow Jones is benefiting from a strong gain from Boeing (BA), which is up 2% after Cowen improved its rating on the aerospace giant’s stock to Outperform against Market Perform.

Sector news

Despite the poor performance of the broader markets, energy stocks continue to show substantial strength amid sharply rising crude oil prices.

Crude oil for July delivery has pulled back well from its highs but remains up $ 1.28 to $ 67.60 a barrel after OPEC and its allies agree to stick to a hike plan progressive production.

Reflecting the strength of the energy sector, the Philadelphia Oil Service index is up 3.8%, the NYSE Arca Natural Gas index is up 3.7% and the NYSE Arca Oil index is up 3.3%.

Steel stocks also continue to show significant strength after bullish manufacturing data, with the NYSE Arca Steel index up 3.2%.

Tobacco, hardware and airline stocks also showed considerable strength on this day, while pharmaceuticals showed noticeable downward movement.

Other markets

In overseas trading, Asia-Pacific stock markets posted a mixed performance during Tuesday’s session. Japan’s Nikkei 225 index fell 0.2%, while the Chinese Shanghai composite index rose 0.3%.

Meanwhile, major European markets all trended higher on this day. While the German DAX index jumped 1%, the British FTSE 100 index rose 0.8% and the French CAC 40 index climbed 0.7%.

In the bond market, Treasuries came under pressure following bullish manufacturing data. As a result, the yield on the ten-year benchmark bond, which moves opposite to its price, is up 4.1 basis points to 1.622%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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