Dow And S&P 500 Climb To New Record Closing Highs - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading session on Monday after initially showing a lack of direction. With the upward move on the day, the Dow and the S&P 500 reached new record closing highs.

The major averages gave back some ground going into the close but remained in positive territory. The Dow edged up 26.32 points or 0.1 percent to 18,298.88, the Nasdaq advanced 30.15 points or 0.6 percent to 5,078.44 and the S&P 500 climbed 6.47 points or 0.3 percent to 2,129.20.

The strength that emerged on Wall Street was partly in reaction to a notable advance by shares of Apple (AAPL), with the tech giant climbing by 1.1 percent.

The gain by Apple came after activist investor Carl Icahn said the company's shares are worth $240 and called for accelerated stock buybacks.

Buying interest may also have been generated by comments from Chicago Federal Reserve Bank President Charles Evans.

In a speech in Stockholm, Evans said the Fed should keep interest rates near zero until early 2016, noting that inflation is still well below the central bank's target.

Nonetheless, traders seemed somewhat reluctant to make any significant moves ahead of the release of some key economic data later in the week.

Reports on housing starts, existing home sales and consumer price inflation are likely to be in focus in the coming days.

Traders are also likely to keep an eye on the minutes of the latest Fed meeting as well as a speech by Fed Chair Janet Yellen.

Meanwhile, traders largely shrugged off a report from the National Association of Home Builders showing an unexpected drop in homebuilder confidence in the month of May.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 54 in May after climbing to a reading of 56 in April. The pullback surprised economists, who had expected the index to inch up to 57.

Sector News

Brokerage stocks showed a strong move to the upside over the course of the trading day, driving the NYSE Arca Broker/Dealer Index up by 1.7 percent. With the gain the index reached a seven-year closing high.

LPL Financial (LPLA), E*Trade (ETFC), and Interactive Brokers (IBKR) turned in some of the brokerage sector's best performances.

Significant strength was also visible among biotechnology stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Biotechnology Index. The gain lifted the index to its best closing level in almost a month.

Trucking, networking, and semiconductor stocks also saw notable strength on the day, while considerable weakness was visible among steel stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index climbed by 0.8 percent, while Hong Kong's Hang Seng Index dropped by 0.8 percent.

Meanwhile, the major European markets all moved higher on the day. While the German DAX Index surged up by 1.3 percent, the French CAC 40 Index rose by 0.4 percent and the U.K's FTSE 100 Index edged up by 0.1 percent.

In the bond market, treasuries pulled back sharply after seeing significant strength last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.7 basis points to 2.228 percent.

Looking Ahead

A report on new residential construction in the month of April may attract some attention on Tuesday, with economists expecting housing starts to climb to an annual rate of 1.029 million.

Trading could also be impacted by reaction to quarterly results from retail giants Wal-Mart (WMT) and Home Depot (HD).