Dow Bounces Into Positive Territory But Nasdaq, S&P 500 Remain In The Red

After coming under pressure early in the session, stocks have regained ground over the course of the trading day on Tuesday. The major averages have climbed well off their lows of the session, with the Dow reaching positive territory.

Currently, the major averages are turning in a mixed performance. While the Dow is up 137.06 points or 0.4 percent at 34,800.78, the S&P 500 is down 8.25 points or 0.2 percent at 4,479.21 and the Nasdaq is down 78.69 points or 0.6 percent at 13,839.20.

The mixed performance on Wall Street comes as traders look ahead to the release of the Labor Department’s highly anticipated report on consumer price inflation on Wednesday.

Economists currently expect the annual rate of consumer price growth to accelerate to 3.6 percent in August from 3.2 percent in July, while the annual rate of core consumer price growth is expected to slow to 4.4 percent from 4.7 percent.

The inflation data could have a significant impact on the outlook for interest rates ahead of the Federal Reserve’s monetary policy meeting next week.

Ahead of the data, CME Group’s FedWatch Tool is currently indicating a 93.0 percent chance the Federal Reserve will leave interest rates unchanged next week.

The outlook for November is a little more uncertain, however, with the FedWatch Tool indicating a 56.4 percent chance rates will remain unchanged and a 40.9 percent chance of another quarter point rate hike.

Some selling pressure has been generated in reaction to a sharp increase by the price of crude oil, with crude for October delivery surging $1.84 to $89.13 a barrel.

The price of crude oil has reached its highest levels since last November amid concerns about tight supplies, raising concerns about sticky inflation.

A steep drop by shares of Oracle (ORCL) is weighing on the tech-heavy Nasdaq, with the software giant plunging by 14.0 percent.

The slump by Oracle comes after the company reported weaker than expected fiscal first quarter revenues and provided disappointing revenue guidance for the current quarter.

Sector News

Software stocks continue to see considerable weakness amid the steep drop by Oracle, with the Dow Jones U.S. Software Index falling by 1.9 percent. The index is pulling back off its best closing level in over a month.

Notable weakness is also visible among housing stocks, as reflected by the 1.2 percent drop by the Philadelphia Housing Sector Index.

On the other hand, energy stocks have moved sharply higher along with the price of crude oil, driving the Philadelphia Oil Service Index and the NYSE Arca Oil Index up by 2.6 percent and 2.2 percent, respectively.

Banking stocks have also shown a significant move to the upside over the course of the session, resulting in a 2.3 percent surge by the KBW Bank Index.

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 jumped by 1.0 percent, while China’s Shanghai Composite Index dipped by 0.2 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index fell by 0.4 percent and the German DAX Index slid by 0.5 percent.

In the bond market, treasuries have shown a lack of direction over the course of the session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.286 percent.

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