(RTTNews) – Stocks continue to turn in a lackluster performance in mid-day trading on Tuesday as traders seem reluctant to make significant moves. The Dow and the Nasdaq reached new record highs in early trading but have given back some ground since then.
Currently, the major averages are turning in a mixed performance. While the S&P 500 is down 3.68 points or 0.1 percent at 3,074.59, the Dow is up 28.34 points or 0.1 percent at 27,490.45 and the Nasdaq is up 5.54 points or 0.1 percent at 8,438.74.
The early strength on Wall Street came amid continued optimism about a potential U.S.-China trade deal, with President Donald Trump and Chinese President Xi Jinping widely expected to sign phase one of an agreement sometime this month.
As part of the deal, the U.S. is likely to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th.
A report from the Financial Times said the U.S. is also considering China’s request to lift the 15 percent tariff on about $125 billion worth of Chinese goods that went into effect on September 1st.
A person familiar with Beijing’s negotiating position told Reuters that China is continuing to press Washington to “remove all tariffs as soon as possible.”
Buying interest was somewhat subdued, however, as traders wait for more concrete developments before continuing to buy stocks following the recent run to record highs.
Stocks gave back ground following the release of a report from the Institute for Supply Management showing growth in U.S. service sector activity reaccelerated by more than anticipated in the month of October.
The ISM said its non-manufacturing index climbed to 54.7 in October from 52.6 in September, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 53.2.
The better than expected data may have raised concerns about the outlook for interest rates after the Federal Reserve indicated last week that it is putting further rate cuts on hold.
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed in the month of September, as the value of imports slumped by more than the value of exports.
The Commerce Department said the trade deficit narrowed to $52.5 billion in September from a revised $55.0 billion in August. The narrower deficit matched economist estimates.
The deficit shrank as the value of imports tumbled by 1.7 percent to $258.4 billion, while the value of exports slid by 0.9 percent to $206.0 billion.
Most of the major sectors are showing only modest moves, contributing to the lackluster performance by the broader markets.
Gold stocks continue to see significant weakness, however, with the NYSE Arca Gold Bugs Index slumping by 2.4 percent.
The weakness among gold stocks comes amid a steep drop by the price of the precious metal, as gold for December delivery is plunging $28.60 to $1,482.50 an ounce.
Interest rate-sensitive commercial real estate and utilities stocks are also seeing considerable weakness, while tobacco, networking and computer hardware stocks have moved to the upside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index surged up by 1.8 percent as trading resumed after a long weekend, while China’s Shanghai Composite Index climbed by 0.5 percent.
The major European markets have shown more modest moves to the upside on the day. While the German DAX Index has inched up by 0.1 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index have risen by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries are extending the notable downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.1 basis points at 1.867 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.