U.S. Stocks Turning In Lackluster Performance Ahead Of Data, Earnings

Stocks have shown a lack of direction over the course of morning trading on Tuesday, with the major averages showing wild swings back and forth across the unchanged line after ending the previous session firmly in negative territory.

Currently, the major averages are turning in a mixed performance. While the Dow is up 66.53 points or 0.2 percent at 31,240.37, the Nasdaq is down 51.18 points or 0.5 percent at 11,321.42 and the S&P 500 is down 8.39 points or 0.2 percent at 3,846.04.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of some key economic data in the coming days.

Reports on consumer and producer price inflation may impact the outlook for monetary policy, while traders are also likely to keep a close eye on reports on retail sales, industrial production and consumer sentiment.

Investors may also be reluctant to get back into the markets ahead of what some expect to be a difficult quarterly earnings season.

However, snack and beverage giant PepsiCo (PEP) got the earnings season off to a positive start, reporting better than expected second quarter results and raised its full-year guidance.

Financial giants JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and Wells Fargo (WFC) are among the companies due to report their quarterly results in the coming days.

Concerns about the emergence of a new, more infectious Covid-19 strain in several parts of the world also continue to weigh on investors’ minds.

Many cities in China are already taking steps to stop the spread of the new strain, leading to worries about another round of painful lockdowns, especially in Shanghai or Beijing.

A Covid-19 resurgence and the resumption of Chinese lockdowns could put further pressure on a global economy that is already being squeezed by aggressive monetary policy tightening by the world’s central banks.

Despite the lackluster performance by the broader markets, energy stocks have moved sharply lower along with the price of crude oil. Crude for August delivery is plummeting $6.81 to $97.28 a barrel amid concerns about the outlook for demand.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 4.2 percent and the NYSE Arca Oil Index is down by 3.2 percent.

Considerable weakness is also visible among gold stocks, as reflected by the 2.3 percent slump by the NYSE Arca Gold Bugs Index. The index has fallen to a two-year intraday low amid a modest decrease by the price of gold.

On the other hand, airline stocks have moved sharply higher amid the steep drop by the price of crude oil, with the NYSE Arca Airline Index soaring by 3.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.8 percent, while China’s Shanghai Composite Index slid by 1.0 percent.

Meanwhile, the major European markets have turned positive over the course of the session. While the French CAC 40 Index has risen by 0.5 percent, the German DAX Index is up by 0.2 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.

In the bond market, treasuries are extending the notable rebound seen during the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.4 basis points at 2.917 percent.

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