WASHINGTON (dpa-AFX) - With traders sticking to the sidelines following recent volatility, stocks are turning in a relatively lackluster performance during trading on Tuesday. The major averages have fluctuated over the course of the session, holding relatively close to the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 5.46 points or 0.1 percent at 9,076.93, the Dow is down 90.49 points or 0.3 percent at 28,612.89 and the S&P 500 is down 7.32 points or 0.2 percent at 3,238.96.
The choppy trading on Wall Street comes amid uncertainty about the impact of rising tensions between the U.S. and Iran following the U.S. airstrike that killed top Iranian military commander Qasem Soleimani.
Iran has vowed to take revenge against the U.S. for the killing of Soleimani, but the lack of an immediate response has offset some of the worries that plagued the markets last Friday.
While traders generally seem optimistic that the war of words between Washington and Tehran will not escalate into a full-fledged military conflict, the uncertainty is keeping buying interest in check.
On the U.S. economic front, the Commerce Department released a report showing the U.S. trade deficit shrank to its smallest level in three years in the month of November.
The report said the trade deficit narrowed to $43.1 billion in November from a revised $46.9 billion in October. Economists had expected the deficit to narrow to $43.8 billion from the $47.2 billion originally reported for the previous month.
The narrower trade deficit came as the value of exports climbed by 0.7 percent to $208.6 billion, while the value of imports slumped by 1.0 percent to $251.7 billion.
A separate report from the Institute for Supply Management showed service sector activity in the U.S. grew at a faster than expected pace in the month of December.
The ISM said its non-manufacturing index climbed to 55.0 in December after dipping to 53.9 in November, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 54.5.
'The non-manufacturing sector had an uptick in growth in December,' said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
'The respondents are positive about the potential resolution on tariffs,' he added. 'Capacity constraints have eased a bit; however, respondents continue to have difficulty with labor resources.'
Sector News
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Oil service stocks have shown a significant move to the downside, however, with the Philadelphia Oil Service Index plunging by 3.1 percent after ending the previous session at a nearly six-month closing high.
The pullback by oil service stocks comes amid a decrease by the price of crude oil, as crude for February delivery is sliding $0.69 to $62.58 a barrel.
On the other hand, semiconductor stocks have moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 1.9 percent.
Chipmaker Microchip Technology (MCHP) is leading the way higher after forecasting fiscal third quarter revenues towards the high end of its previous guidance.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.6 percent, while China's Shanghai Composite Index climbed by 0.7 percent.
Meanwhile, the major European markets finished the day mixed. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both closed just below the unchanged line.
In the bond market, treasuries are showing a lack of direction after turning lower over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.807 percent.
Copyright RTT News/dpa-AFX
© 2020 AFX News
