Stocks Close Mixed But Nasdaq Reaches New Record High - U.S. Commentary

(RTTNews) - Stocks turned in a relatively lackluster performance during trading on Monday before ending the session mixed. Despite the choppy trading, the tech-heavy Nasdaq ended the session at a new record closing high.

The major averages ended the day on opposite sides of the unchanged line. While the Dow dipped 27.05 points or 0.1 percent to 20,916.46, the Nasdaq climbed 44.00 points or 0.7 percent to 6,091.60 and the S&P 500 rose 4.13 points or 0.2 percent to 2,388.33.

Traders seemed somewhat reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed is likely to leave interest rates unchanged, traders will examine the accompanying statement for clues about future rate hikes.

The Labor Department is also due to release its closely watched monthly jobs report on Friday, with the report expected to show an increase of about 180,000 jobs.

On the U.S. economic front, a report released by the Institute for Supply Management showed that growth in manufacturing activity slowed more than expected in the month of April.

The ISM said its purchasing managers index dropped to 54.8 in April from 57.2 in March, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 56.5.

The Commerce Department also released a report showing that personal income rose slightly less than expected in the month of March.

The report said personal income rose by 0.2 percent in March after climbing by a downwardly revised 0.3 percent in February.

Economists had expected income to climb by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending was unchanged for the second consecutive month. Spending had been expected to rise by 0.2 percent.

A separate report from the Commerce Department showed that construction spending unexpectedly dipped by 0.2 percent in March.

Sector News

Internet stocks showed a strong move to the upside on the day, driving the Dow Jones Internet Index up by 1.1 percent. With the gain, the index reached its best closing level in over seventeen years.

Social media giant Twitter (TWTR) posted a standout gain after a SEC filing showed that CEO Jack Dorsey bought 574,000 more shares of the company.

Software and semiconductor stocks also saw considerable strength, contributing to the upward move by the tech-heavy Nasdaq.

On the other hand, gold stocks fell sharply on the day, dragging the NYSE Arca Gold Bugs Index down by 3.1 percent. The drop pulled the index down to its lowest closing level in well over a month.

The weakness in the gold sector came amid a notable decrease by the price of the precious metal, with gold for June delivery sliding $12.80 to $1,255.50 an ounce.

Oil service stocks also showed a significant move to the downside, as crude oil for June delivery fell $0.49 to $48.84 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although several markets were closed for May Day holidays. Japan's Nikkei 225 Index climbed by 0.6 percent, while Australia's All Ordinaries Index rose by 0.5 percent.

Meanwhile, the European markets are closed on the day for the May Day holiday.

In the bond market, treasuries came under pressure over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.3 basis points to 2.325 percent.

Looking Ahead

Trading activity on Tuesday may remain somewhat subdued as the Fed begins its two-day monetary policy meeting amid a light day on the economic front.