After ending the previous session firmly in negative territory, stocks have fluctuated over the course of morning trading on Tuesday. The tech-heavy Nasdaq has shown a notable move to the upside, while the Dow and the S&P 500 have been bouncing back and forth across the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Dow is down 31.77 points or 0.1 percent at 30,192.12, the Nasdaq is up 46.44 points or 0.4 percent at 12,744.89 and the S&P 500 is up 2.62 points or 0.1 percent at 3,703.27.
The choppy trading on Wall Street comes as traders seem reluctant to make significant moves as they await the results of two key Senate runoffs in Georgia.
The outcome of the runoff elections will determine which party controls the Senate and could have a major impact on what President-elect Joe Biden is able to accomplish.
Even with a Democratic-controlled Senate, Biden may still face difficulty pushing through his proposed tax policies but could have more success on issues like government spending, including increasing the size of stimulus checks.
Traders also remain on edge amid concerns about the impact of new restrictions imposed in response to surging coronavirus cases and new strains of the virus.
The U.K. is set to return to a national lockdown amid concerns about a more contagious variant of Covid-19, with Prime Minister Boris Johnson warning the coming weeks would be the "hardest yet."
Japan is also considering declaring a state of emergency in the greater Tokyo area, while Germany is considering extending lockdown measures beyond January 10th.
In U.S. economic news, a report released by the Institute for Supply Management showed an unexpected acceleration in the pace of growth in manufacturing activity in the month of December.
The ISM said its manufacturing PMI climbed to 60.7 in December after dipping to 57.5 in November, with a reading above 50 indicating growth. Economists had expected the index to edge down to 56.6.
With the unexpected increase, the manufacturing index reached its highest level since hitting 61.3 in August of 2018.
However, economists noted the headline index was artificially boosted by a jump by the supplier deliveries index, which suggested deliveries slowed at a faster rate.
Most of the major sectors are showing only modest moves on the day, although substantial strength is visible among energy stocks.
The strength in the energy sector comes as the price of crude oil for February delivery is spiking $2.34 to $49.96 a barrel after a report from Reuters said oil producers are nearing a compromise to hold output steady in February.
Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index is up by 4.4 percent, the Philadelphia Oil Service Index is up by 4.1 percent and the NYSE Arca Oil Index is up by 3.9 percent.
Semiconductor stocks have also shown a strong move to the upside on the day, driving the Philadelphia Semiconductor Index up by 1.2 percent.
Chipmaker Micron Technology (MU) is posting a standout gain after Citi upgraded its rating on the company's stock to Buy from Sell.
On the other hand, gold stocks are giving back ground after yesterday's rally, with the NYSE Arca Gold Bugs Index falling by 1.7 percent after soaring by 7.6 percent on Monday.
The pullback by gold stocks comes despite a continued increase by the price of the precious metal, as gold for February delivery is rising $3.40 to $1,950 an ounce.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index advanced by 0.7 percent.
The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the German DAX Index is down by 0.7 percent and the French CAC 40 Index is down by 0.9 percent.
In the bond market, treasuries have moved to the downside after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3 basis points at 0.947 percent.
For comments and feedback contact: editorial@rttnews.com
