Major Averages Close Slightly Lower After Choppy Trading Day - U.S. Commentary

(RTTNews) - After failing to sustain an early upward move, stocks showed a lack of direction over the course of the trading session on Monday. The major averages pulled back off their highs and spent the afternoon bouncing back and forth across the unchanged line.

The major averages eventually ended the day slightly lower. The Dow edged down 3.63 points or less than 0.1 percent to 18,120.17, the Nasdaq slipped 9.54 points or 0.2 percent to 5,235.03 and the S&P 500 closed down just 0.04 points at 2,139.12.

While strength overseas generated some early buying interest, traders seemed reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement later this week.

Following a two-day meeting beginning on Tuesday, the Fed is scheduled to announce its latest monetary policy decision Wednesday afternoon.

Recent soft economic data has led most analysts to predict that the Fed will leave interest rates unchanged, but the central bank could still surprise the markets.

On the U.S. economic front, the National Association of Home Builders released a report showing a jump in homebuilder confidence in the month of September.

The report said the NAHB/Wells Fargo Housing Market Index surged up to 65 in September from a downwardly revised 59 in August.

Economists had expected the index to come in unchanged compared to the 60 originally reported for the previous month.

With the substantial increase, the housing market index reached its highest level since hitting a matching reading in October of 2015.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broad markets.

Steel stocks saw significant strength, however, with the NYSE Arca Steel Index surging up by 2.1 percent. The index continued to recover after hitting a two-month closing low last Tuesday.

Cliffs Natural Resources (CLF), Olympic Steel (ZEUS), and U.S. Steel (X) turned in some of the steel sector's best performances.

Utilities, commercial real estate and networking stocks also saw some strength on the day, although buying interest was relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although the Japanese markets were closed for a holiday. Hong Kong's Hang Seng Index advanced by 0.9 percent, while China's Shanghai Composite Index climbed by 0.8 percent.

The major European markets also moved notably higher on the day. While the German DAX Index jumped by 1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index surged up by 1.4 percent and 1.5 percent, respectively.

In the bond market, treasuries closed nearly flat for the second consecutive session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.696 percent.

Looking Ahead

While trading activity may remain subdued on Tuesday as the Fed's two-day meeting gets underway, traders are likely to keep an eye on the Commerce Department's report on housing starts in August.