US open: Wall Street trades flat despite gains for bank shares

Wall Street was flat as investors took a breather after pushing the S & P 500 to a fresh record high during the previous session, amid a tad of renewed speculation in markets regarding the risk of new provocations from Pyongyang following the latest round of sanction from the UN Security Council.

At 1732 BST, the Dow Jones Industrial Average was edging higher by 0.04% or 10.15 points at 22,128.38, alongside a dip of 0.02% to 2,495.89 for the S&P 500 while the Nasdaq Composite was lower by 0.05% or 3.22 points to 6,451.50.

Banks on the other hand were on the advance, with the widely-followed KBW sector gauge rising 1.64% to 93.51 points, reflecting the recent rise in government bond yields and renewed talk on Capitol Hill regarding the prospect for tax reforms before the year was out.

Overnight, US Treasury Secretary Steve Mnuchin indicated at a conference hosted by CNBC and Institutional Investor that he expected tax reforms to be in place before the current year was out and that they might be made retroactive to 1 January.

Oanda analyst Craig Erlam said: "It would appear that a running start to the week and fresh record highs in the S&P 500 has proven a little much for some traders, with profit taking seen ahead of Wednesday’s open.

"Naturally there is still plenty of underlying geopolitical risk in the markets at the moment, even if acts of provocation have decreased and become less hostile, and this is likely to put a cap on risk rallies for now. The longer this period of calm continues, the more relaxed investors will become which will be better for riskier assets, while safe havens will continue to experience unwinding."

On the economic front, producer price data for August showing a 0.2% rise on the month left economists a little bit divided on the outlook for price pressures.

For her part, Blerina Uruci told clients: "We expect pipeline price pressures to remain moderate, reflecting the fact that the headwind from imported inflation and global commodity prices has abated in recent months."

In corporate news, Apple was softer after the unveiling of the tech giant's latest phone, the iPhone X on Tuesday prompted a mixed reaction and the company said it won't be delivered until November.

Elsewhere, Centene rallied after the company said late on Tuesday that it has signed an agreement whereby Fidelis Care will become its health plan in the state of New York.

Nordstrom was also in the spotlight after a report that it is taking steps to go private, while SeaDrill traded on the front foot after saying late on Tuesday that it has filed for bankruptcy protection and agreed a restructuring plan with its lenders.