(RTTNews) - After failing to sustain an early upward move, stocks turned in another lackluster performance during trading on Tuesday. While upbeat U.S. retail sales data contributed to the early strength, buying interest waned over the course of the session.
The major averages eventually ended the session mixed for the fourth time in the past five sessions. While the Dow crept up 2.71 points or less than 0.1 percent to 13,172.14, the Nasdaq fell 5.54 points or 0.2 percent to 3,016.98 and the S&P 500 edged down 0.18 points or less than 0.1 percent to 1,403.93.
The early strength on Wall Street came following the release of a report from the Commerce Department showing a bigger than expected rebound by U.S. retail sales in the month of July.
The Commerce Department said retail sales rose by 0.8 percent in July following a revised 0.7 percent drop in June. Economists had expected sales to edge up by 0.3 percent.
Excluding auto sales, retail sales still rose by 0.8 percent in July, while core sales, which exclude autos, gasoline and building materials, increased by 0.9 percent.
"It looks like lower gas prices, a nice rally in stocks and stronger job growth (for July, at least), and a few months away from the stores, helped boost consumer spending," said Jennifer Lee, senior economist at BMO Capital. "A good start to the quarter but continued job gains are needed to ensure it continues."
While the report generated some positive sentiment, buying interest was relatively subdued as traders seemed reluctant to continue buying stocks following the strength seen in recent weeks.
Traders subsequently looked to cash in on the early gains, contributing to the pullback by the markets. Nonetheless, selling pressure also remained subdued amid uncertainty about the near-term outlook.
Among individual stocks, shares of Home Depot (HD) moved to the upside after the home improvement retailer reported stronger than expected second quarter earnings growth. The company also upwardly revised its full-year earnings guidance. Home Depot rose by 3.6 percent.
Luxury goods retailer Michael Kors (KORS) posted a more substantial gain after reporting better than expected first quarter earnings and raising its full-year earnings guidance. Shares of Michael Kors surged up by 16.5 percent.
On the other hand, shares of Groupon (GRPN) fell sharply after the online deals website reported second quarter earnings that exceeded analyst estimates but on weaker than expected sales. Groupon tumbled by 27 percent on the news.
Networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.3 percent. With the loss, the index pulled back further off last Thursday's one-month closing high.
Ciena (CIEN) helped to lead the networking sector lower, falling by 7 percent, while Polycom (PLCM) and Juniper Networks (JNPR) also posted notable losses.
Significant weakness also emerged among computer hardware stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca Computer Hardware Index. EMC Corp. (EMC) turned in one of the hardware sector's worst performances.
Steel, airline, and internet stocks also came under pressure over the course of the trading day, contributing to the pullback by the broader markets. On the other hand, moderate strength remained visible among trucking and pharmaceutical stocks.
In overseas trading, stock markets across the Asia-Pacific region moved higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.
The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.9 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index ended the day up by 0.7 percent and 0.6 percent, respectively.
In the bond market, treasuries came under pressure on the heels of the upbeat retail sales data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 7.2 basis points to a two-month closing high of 1.726 percent.
Another batch of key U.S. economic data is scheduled to be released on Wednesday, with traders likely to keep an eye on reports on industrial production, consumer prices, homebuilder confidence, and New York manufacturing activity.
On the earnings front, retailers Target (TGT), Abercrombie & Fitch (ANF), and Staples (SPLS) are among the companies due to report their quarterly results before the start of trading on Wednesday.
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