After moving higher at the start of trading on Wednesday, stocks have given back ground over the course of the morning. The major averages have all pulled back well off their highs of the young session.
Currently, the major averages are on opposite sides of the unchanged line. While the Dow is down 41.38 points or 0.1 percent at 34,091.65, the Nasdaq is up 28.14 points or 0.2 percent at 13,661.64 and the S&P 500 is up 4.94 points or 0.1 percent at 4,169.60.
The initial strength on Wall Street partly reflected a positive reaction to better than expected earnings news from well-known companies such as Tupperware (TUP), Office Depot parent ODP Corp. (ODP), and Activision Blizzard (ATVI).
Buying interest waned shortly after the start of trading, however, as traders continue to question whether the largely upbeat results this earnings season are enough to drive further upside for the markets.
The subsequent pullback by the major averages came following the release of a report from the Institute for Supply Management showing an unexpected slowdown in the pace of growth in U.S. service sector activity in the month of April.
The ISM said its services PMI edged down to 62.7 in April after jumping to an all-time high of 63.7 in March. A reading above 50 still indicates growth in the service sector, but economists had expected the index to inch up to 64.3.
The unexpected drop by the services index comes after the ISM released a separate report earlier this week showing an unexpected slowdown in the pace of growth in U.S. manufacturing activity.
The readings on manufacturing and service sector activity both remain at elevated levels, but the data may have raised concerns about the pace of the economic recovery.
Before the start of trading, payroll processor ADP released a report showing private sector job growth accelerated in the month of April but still came in below economist estimates.
ADP said private sector employment spiked by 742,000 jobs in April after surging by an upwardly revised 565,000 jobs in March.
However, economists had expected private sector employment to soar by 800,000 jobs compared to the jump of 517,000 jobs originally reported for the previous month.
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.
Economists currently expect employment to jump by 978,000 jobs in April after surging up by 916,000 jobs in May. The unemployment rate is also expected to dip to 5.8 percent from 6.0 percent.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Energy stocks have shown a strong move to the upside, however, with an increase by the price of crude oil leading to the strength in the sector. Crude for June delivery is climbing $0.80 to $66.39 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.1 percent and the NYSE Arca Oil Index is up by 2.9 percent.
Airline and steel stocks are also seeing notable strength on the day, while interest rate-sensitive commercial real estate and utilities stocks have moved to the downside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday, with several major markets closed for holidays. Hong Kong's Hang Seng Index fell by 0.5 percent, while Australia's S&P/ASX 200 Index rose by 0.4 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the German DAX Index has surged up by 1.7 percent, the U.K.'s FTSE 100 Index is up by 1.3 percent and the French CAC 40 Index is up by 1.2 percent.
In the bond market, treasuries have rebounded after seeing initial weakness but remain slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 1.603 percent.
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