Stocks Close Modestly Lower Following Lackluster Session - U.S. Commentary

(RTTNews) - After moving mostly higher in early trading, stocks turned in a lackluster performance over the course of the trading day on Monday. The major averages came under pressure going into the close, ending the session modestly lower.

The Dow edged down 11.61 points or 0.1 percent to 18,116.04, the Nasdaq slid 15.44 points or 0.3 percent to 5,010.97 and the S&P 500 dipped 3.68 points or 0.2 percent to 2,104.42.

The early strength on Wall Street partly reflected a continued positive reaction to last week's monetary policy statement from the Federal Reserve.

The Fed's statement was perceived as dovish, as the central bank lowered its forecast for interest rates at the end of the year.

Optimism about a slower than previously anticipated increase in interest rates contributed to considerable strength in the markets last week.

However, traders subsequently seemed reluctant to make any significant moves amid lingering uncertainty about the monetary policy outlook.

Even though recent economic data has shown signs of weakness, most analysts still expect the Fed to hike rights in June.

On the economic front, the National Association of Realtors released a report showing a rebound in existing home sales in the month of February.

NAR said existing home sales rose 1.2 percent to an annual rate of 4.88 million in February after tumbling 4.9 percent to a rate of 4.82 million in January. Economists had expected existing home sales to climb to a rate of 4.90 million.

Sector News

While many of the major sectors ended the day showing only modest moves, significant strength was visible among steel stocks. Reflecting the strength in the steel sector, the NYSE Arca Steel Index surged up by 2.3 percent.

Gold stocks also turned in a strong performance, as reflected by the 2.1 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came as gold for April delivery rose $3.10 to $1,187.70 an ounce.

On the other hand, railroad stocks came under pressure on the day, dragging the Dow Jones Railroads Index down by 4.1 percent. Kansas City Southern (KSU) led the sector lower after providing disappointing guidance.

Considerable weakness also emerged among biotechnology stocks, resulting in a 2 percent drop by the NYSE Arca Biotechnology Index.

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 advanced by 1 percent, while Australia's All Ordinaries Index fell by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index dropped by 0.7 percent and the German DAX Index tumbled by 1.2 percent.

In the bond market, treasuries saw modest strength, extending a recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.5 basis points to 1.915 percent.

Looking Ahead

Economic data is likely to be in focus on Tuesday, with traders likely to keep a close eye on reports on consumer price inflation and new home sales.