U.S. Stocks Nearly Flat On Mixed Earnings News
After ending a four-day winning streak in the previous session, stocks have shown a lack of direction over the course of morning trading on Wednesday. The major averages have been bouncing back and forth across the unchanged line.
Currently, the major averages are nearly flat. While the Nasdaq is down 10.97 points or 0.1 percent at 11,852.93, the Dow is up 18.50 points or 0.1 percent at 28,698.31 and the S&P 500 is up 1.86 points or 0.1 percent at 3,513.79.
The choppy trading on Wall Street comes as traders digest a mixed batch of earnings news ahead of the release of a flood of corporate results due in the comings days.
Shares of Bank of America (BAC) have come under pressure after the financial giant reported third quarter earnings that beat analyst estimates but on weaker than expected revenues.
Banking giant Wells Fargo (WFC) has also shown a notable move to the downside after reporting weaker than expected third quarter earnings, although its revenues came in above estimates.
On the other hand, shares of Goldman Sachs (GS) are seeing modest strength after the investment bank reported third quarter results that blew past analyst estimates.
U.S. Bancorp (USB) has also moved higher after the bank holding company reported third quarter results that exceeded analyst estimates on both the top and bottom lines.
Continued uncertainty about the passage a new stimulus bill may also be keeping traders on the sidelines, as Democrats and Republicans appear to be an impasse in negotiations over a new relief package.
In U.S. economic news, the Labor Department released a report showing producer prices increased by more than expected in the month of September.
The Labor Department said its producer price index for final demand climbed by 0.4 percent in September after rising by 0.3 percent in August. Economists had expected prices to edge up by 0.2 percent.
The report said food prices jumped by 1.2 percent in September after decreasing by 0.4 percent in August, while energy prices fell by 0.3 percent after dipping by 0.1 percent.
Excluding food and energy prices, core producer prices still rose by 0.4 percent in September, matching the increase seen in the previous session. Core prices were also expected to inch up by 0.2 percent.
Despite the lack of direction being shown by the broader markets, oil service stocks have shown a substantial move to the upside on the day. Reflecting the strength in the sector, the Philadelphia Oil Service Index has surged up by 3.3 percent.
The rally by oil service stocks comes amid an increase by the price of crude oil, with crude for November delivery climbing $0.57 to $40.77 a barrel.
Other energy stocks are also moving notably higher along with transportation stocks, while most of the other major sectors are showing only modest moves on the day.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index fell by 0.6 percent.
The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.5 percent, the French CAC 40 Index is just above the unchanged line and the German DAX Index is up by 0.1 percent.
In the bond market, treasuries are seeing modest strength after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 0.717 percent.
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