Dow And S&P 500 Close Higher, Nasdaq Posts Slim Loss - U.S. Commentary

(RTTNews) - Following the sharp pullback seen last Friday, stocks saw considerable volatility over the course of the trading day on Monday. Upbeat corporate and economic news generated some buying interest, but lingering worries about Ukraine also weighed on the markets.

While the Dow and the S&P 500 managed to close in positive territory, the Nasdaq ended the day slightly lower. The Nasdaq edged down 1.16 points or less than a tenth of a percent to 4,074.40, while the Dow rose 87.28 points or 0.5 percent to 16,448.74 and the S&P 500 climbed 6.03 points or 0.3 percent to 1,869.43.

Early in the session, traders reacted positively to news on the merger-and-acquisition front, with shares of AstraZeneca (AZN) moving sharply higher amid news that drug giant Pfizer (PFE) is seeking to renew discussions about a potential takeover of its British rival.

Pfizer noted that it previously offered to acquire AstraZeneca in a deal valued at approximately 58.8 billion pounds, or $98.7 billion.

Susser Holdings (SUSS) and Furiex Pharmaceuticals (FURX) also posted standout gains after agreeing to be acquired by Energy Transfer Partners (ETP) and Forest Labs (FRX), respectively. Susser is being acquired for $1.8 billion, while Furiex is being bought for $1.5 billion.

Positive sentiment was also generated by the release of a report from the National Association of Realtors showing that U.S. pending home sales rebounded by much more than anticipated in the month of March.

NAR said its pending home sales index surged up by 3.4 percent to 97.4 in March after edging down by 0.5 percent to a revised 94.2 in February. Economists had been expecting a much more modest increase of about 0.6 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

However, traders seemed somewhat reluctant to continue buying stocks ahead of the Federal Reserve's monetary policy announcement on Wednesday as well as the monthly jobs report on Friday.

Lingering concerns about the ongoing crisis in Ukraine also helped to keep buying interest subdued amid news that the U.S. is imposing new sanctions on several individuals and companies linked to Russian President Vladimir Putin's inner circle.

President Obama acknowledged that the new sanctions may not work and said further Russian aggression towards Ukraine could require less narrowly targeted sectoral sanctions that hit the banking or defense industries.

Sector News

Despite the volatility shown by the broader markets, pharmaceutical stocks managed to perform well throughout much of the session. The NYSE Arca Pharmaceutical Index rose by 1.7 percent to a new record closing high.

While AstraZeneca helped lead the sector higher, Shire (SHPG), AbbVie (ABBV), and Hospira (HSP) also posted strong gains.

Tobacco stocks also saw significant strength on the day, resulting in a 1.1 percent gain by the NYSE Arca Tobacco Index. Altria (MO) and Lorillard (LO) turned in two of the sector's best performances.

Meanwhile, gold stocks moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 2.2 percent. The weakness in the sector came as gold for June delivery dipped $1.80 to $1,299 an ounce.

Banking, airline, and networking stocks also came under pressure on the day, partly offsetting the strength seen in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index dropped by 1 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index and the German DAX Index rose by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries regained ground after coming under pressure in early trading but still closed modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.1 basis points to 2.677 percent.

Looking Ahead

Reports on home prices and consumer confidence are likely to attract some attention on Tuesday, although traders may remain on the sidelines as the two-day Fed meeting gets underway.

On the earnings front, Sprint (S), Merck (MRK), Bristol-Myers (BMY), and Goodyear Tire (GT) are among the companies due to report their quarterly results before the start of trading on Tuesday.