U.S. Stocks Finish Lackluster Session Modestly Higher

(RTTNews) - After recovering from an early move to the downside, stocks turned in a relatively lackluster performance over the course of the trading session on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing modestly higher.

The Dow inched up 32.26 points or 0.1 percent to 49,533.19, the Nasdaq edged up 31.71 points or 0.1 percent to 22,578.38 and the S&P 500 crept up 7.05 points or 0.1 percent to 6,843.22.

The choppy trading on Wall Street came as traders seemed reluctant to make more significant moves ahead of release of key economic data in the coming days.

A report on personal income and spending in the month of December is likely to attract attention, as it includes the Federal Reserve's preferred readings on inflation.

The minutes of the Fed's latest monetary policy meeting may also shed additional light on the outlook for interest rates.

Earlier in the day, the major averages moved notably amid weakness among technology stocks, with the tech-heavy Nasdaq dropping to its lowest intraday level in almost three months.

Concerns about potential disruptions caused by the artificial intelligence buildout have recently weighed on tech stocks, which had helped lead the markets to record highs.

"Investors are increasingly questioning whether the marginal dollar spent on AI will generate the expected return," said Daniela Hathorn, Senior Market Analyst at Capital.com. "At the same time, market uncertainty is rising as new AI models frequently disrupt established players."

"With competitive dynamics evolving rapidly, it is unclear who the long-term winners will be," she added. "This uncertainty has led to underperformance across much of big tech, even as the broader market remains relatively resilient."

On the U.S. economic front, the National Association of Home Builders released a report showing homebuilder confidence has unexpectedly seen a modest deterioration in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 36 in February after slipping to 37 in January. Economists had expected the index to inch up to 38.

With the unexpected dip, the housing market index dropped to its lowest level since hitting 32 last September.

Sector News

Despite the recovery by the broader markets, computer hardware stocks continued to see substantial weakness on the day, with the NYSE Arca Computer Hardware Index tumbling by 3.2 percent.

Gold stocks also moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 3.2 percent.

Housing, software and energy stocks also saw notable weakness, while airline stocks moved sharply higher, driving the NYSE Arca Airline Index up by 2.5 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday, with many markets closed for holidays. Japan's Nikkei 225 Index fell by 0.3 percent, while Australia's S&P/ASX 200 Index rose by 0.2 percent.

Meanwhile, European stocks moved mostly higher on the day. While the French CAC 40 Index climbed by 0.5 percent, the German DAX Index and the U.K.'s FTSE 100 Index both advanced by 0.8 percent.

In the bond market, treasuries spent most of the session lingering near the unchanged line before closing roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, edged down less than a basis point to 4.052 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to reports on durable goods orders, housing starts and industrial production as well as the minutes of the latest Fed meeting.