Cautious Trading Grips U.S. Markets

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Shares in the U.S. registered a mixed performance on Tuesday as investors held their horses ahead of the July meeting of the Federal Reserve policy officials. Mixed corporate earnings released so far also appeared to have a hand in mixed trading in U.S. stocks.

Markets are not sure what to expect from the meeting of Fed policy officials, but optimism has grown in recent times that the monetary regulator could hike interest rates at least once before the end of this year. Hope of a rate hike by the Fed is predicted on a recent flow of encouraging economic data that showed improvements in labor, retail and housing sectors.

But renewed weakness in crude oil and iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) prices continues to keep investor on the edge of their seats. The growing number of active rigs and the rising gasoline stockpiles in the U.S. have triggered fresh fears that the global oil market could be headed for another round of a supply glut, which could destroy prices.

How the major indices moved

The Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) was on Tuesday rattled by disappointing corporate earnings releases. The blue-chip index that recently sprinted a string of gains and hit record closing levels pulled back 0.1% after shedding more than 19 points to close the day at closing 18474.

McDonald’s Corporation (NYSE:MCD) was among the stocks the led the Dow down on Tuesday. The restaurant operator reported weaker-then-expected comparable store sales, which triggered a selloff in the stock. MCD shares declined 4.5%.

Verizon Communications Inc. (NYSE:VZ) was another source of pressure on the Dow as the carrier said its revenue in the first quarter fell more than expected.

But Caterpillar Inc. (NYSE:CAT) and United Technologies Corporation (NYSE:UTX) protected the Dow from further deterioration with their gains.

The S&P 500 (INDEXSP:.INX) was little changed on Tuesday with the broader index posting a fractional gain of 0.03%. Analysts now see second quarter earnings of companies in the S&P 500 falling less than previously modeled.

The NASDAQ Composite (INDEXNASDAQ:.IXIC) was the best performer of the three major U.S. stock indices as it rose 0.2%. Technology shares led the gains in the Nasdaq.

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