Stocks Close Modestly Lower But Well Off Worst Levels - U.S. Commentary

(RTTNews) - While trading activity was somewhat subdued, stocks moved mostly lower over the course of the trading session on Monday. With the lower close on the day, the major averages pulled back further off their recent multi-month highs.

The major averages ended the day in the red but well off their worst levels of the session. The Dow edged down 26.51 points or 0.2 percent to 17,977.24, the Nasdaq slipped 10.44 points or 0.2 percent to 4,895.79 and the S&P 500 dipped 3.79 points or 0.2 percent to 2,087.79.

The weakness on Wall Street came as traders cashed in on recent gains ahead of the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to keep a close eye on the accompanying statement for clues about the outlook for the next meeting in June.

Earnings news is also likely to continue to attract attention this week, as a slew of big name companies are due to release their quarterly results in the coming days.

On the U.S. economic front, the Commerce Department released a report showing an unexpected decrease in new home sales in the month of March.

The report said new home sales fell 1.5 percent to an annual rate of 511,000 in March from a revised rate of 519,000 in February.

The decrease surprised economists, who had expected new home sales to climb to a rate of 522,000 from the 512,000 originally reported for the previous month.

Despite the monthly decrease, new home sales were still up by 5.4 percent compared to a rate of 485,000 in the same month a year ago.

Steel stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Steel Index down by 4.5 percent.

Energy, railroad, and brokerage stocks have also came under pressure, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both fell by 0.8 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index dropped by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index both slid by 0.8 percent.

In the bond market, treasuries ended the day modestly lower following a lackluster session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 1.902 percent.

Looking ahead, trading on Tuesday may be impacted by reaction to reports on durable goods orders, home prices, and consumer confidence.