WASHINGTON (dpa-AFX) - After trending higher over the past several sessions, stock showed a lack of direction over the course of the trading day on Tuesday. The major averages bounced back and forth across the unchanged line before eventually ending the day modestly lower.
The major averages finished the session well off their worst levels of the day but still in the red. The Dow dipped 61.56 points or 0.2 percent to 40,834.97, the Nasdaq fell 59.83 points or 0.3 percent to 17,816.94 and the S&P 500 slipped 11.13 points or 0.2 percent to 5,597.12.
The modestly lower close on Wall Street may partly have reflected profit taking following the recent upward trend on Wall Street, which saw the Nasdaq and the S&P 500 close higher for eight consecutive sessions.
Trading activity remained relatively subdued, however, as traders seemed reluctant to make significant moves ahead of key events later this week that could impact the outlook for interest rates.
Traders are likely to analyze the minutes of the Federal Reserve's latest monetary policy meeting, which are due to be released on Wednesday, for additional clues about the likelihood of a rate cut next month.
Later in the week, remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium are also likely to attract attention.
According to CME Group's FedWatch Tool, there is a 73.5 percent of a quarter point rate cut next month and a 26.5 percent chance of a half point rate cut.
'September is being tipped as the month for that first Fed cut after inflation finally dropped below 3%,' said Danni Hewson, AJ Bell head of financial analysis. 'How far Jay Powell and the FOMC will go, how deep that first cut will be, and whether or not it could be the only one delivered this year are now the questions on investors' lips.'
She added, 'Nerves that the Fed had been too slow have been somewhat allayed, but every word spoken at this week's Jackson Hole Symposium will still be scrutinized.'
Sector News
Substantial weakness among energy stocks weighed on the markets, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index plunging by 3.4 percent and 2.8 percent, respectively.
The weakness among energy stocks came as the price of crude oil is seeing further downside after moving sharply lower over the two previous sessions.
Considerable weakness was also visible among steel stocks, as reflected by the 1.4 percent loss posted by the NYSE Arca Steel Index.
Semiconductor, natural gas and brokerage stocks also saw notable weakness, while networking stocks showed a strong move to the upside on the day.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index surged by 1.8 percent, while China's Shanghai Composite Index slid by 0.9 percent.
Meanwhile, the major European have all moved to the downside on the day. While the U.K.'s FTSE 100 Index slumped by 1.0 percent, the German DAX Index fell by 0.4 percent and the French CAC 40 Index dipped by 0.2 percent.
In the bond market, treasuries extended the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, decreased by 4.9 basis points to 3.818 percent.
Looking Ahead
Early trading activity on Wednesday may be somewhat subdued ahead of the afternoon release of the minutes of the latest Fed meeting.
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