Modest Strength Remains Visible On Wall Street - US Commentary
WASHINGTON (Alliance News) - After an initial move to the upside, stocks have fluctuated over the course of the trading session on Wednesday. Buying interest has remained relatively subdued, although the major averages have largely maintained a positive bias.
Currently, the major averages are posting modest gains. The Dow is up 16.85 points or 0.1% at 24,723.26, the Nasdaq is up 33.42 points or 0.5% at 7,385.05 and the S&P 500 is up 7.24 points or 0.3% at 2,718.69.
The early strength on Wall Street partly reflected a positive reaction to earnings news from Macy's (M), with the department store operator surging up by 9.9%.
Macy's has jumped to its best intraday level in over a year after reporting better than expected first quarter results and providing upbeat guidance.
Traders seem somewhat reluctant to make more significant moves, however, with geopolitical uncertainty keeping some traders on the sidelines after North Korea threatened to cancel an historic meeting between leader Kim Jong Un and President Donald Trump.
In a statement published by the state-run Korean Central News Agency, North Korean First Vice Minister of Foreign Affairs Kim Kye Gwan suggested that Trump must accept the reclusive communist country as a nuclear power.
"If the US is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-US summit," Kim said.
Kim pointed to "unbridled remarks" by US officials such as National Security Adviser John Bolton calling on North Korea to abandon nuclear weapons first and be compensated afterward.
The statement from Kim comes after North Korea canceled high-level talks with South Korea planned for Wednesday over US-South Korean military drills.
Despite the threats, White House Press Secretary Sarah Sanders said the administrations remains hopeful the meeting will take place.
On the US economic front, the Commerce Department released a report showing a sharp pullback in new residential construction in the month of April.
The report said housing starts plunged by 3.7% to an annual rate of 1.287 million in April after jumping by 3.6% to an upwardly revised 1.336 million in March.
Economists had expected housing starts to drop to an annual rate of 1.310 million from the 1.319 million originally reported for the previous month.
The Commerce Department said building permits also tumbled by 1.8% to an annual rate of 1.352 million in April after surging up by 4.1% to an upwardly revised 1.377 million in March.
Building permits, an indicator of future housing demand, had been expected to edge down to 1.350 million from the 1.354 million originally reported for the previous month.
A separate report from the Federal Reserve showed industrial production increased by slightly more than anticipated in the month of April.
The Fed said industrial production climbed by 0.7% in April, matching the upwardly revised increase in March. Economists had expected industrial production to rise by 0.6%.
Steel stocks continue to see considerable strength in mid-day trading, resulting in a 1.9% advance by the NYSE Arca Steel Index. With the gain, the index has reached its best intraday level in well over two months.
Significant strength also remains visible among tobacco stocks, as reflected by the 1.4% gain being posted by the NYSE Arca Tobacco Index. The index is bouncing off a three-month closing low.
Oil service, transportation, and semiconductor stocks are also seeing notable strength, while utilities stocks have come under pressure on the day.
Reflecting the weakness in the utilities sector, the Dow Jones Utilities Average has fallen by 1.1% to a two-month intraday low.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.4%, while Hong Kong's Hang Seng Index edged down by 0.1%.
Meanwhile, the major European markets showed modest moves to the upside on the day. While the French CAC 40 Index rose by 0.3%, the German DAX Index and the UK's FTSE 100 Index both crept up by 0.2%.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.085%.
Copyright RTT News/dpa-AFX
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