Stocks Close Narrowly Mixed Following Lackluster Session - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout the trading day on Monday, as traders seemed reluctant to make any significant moves. The choppy trading came on the heels of the mixed performance shown by the markets last week.

The major averages eventually ended the day on opposite sides of the unchanged line. While the Nasdaq rose 10.25 points or 0.2 percent to 4,408.18, the Dow dipped 25.24 points or 0.2 percent to 16,826.60 and the S&P 500 edged down 0.73 points or less than a tenth of a percent to 1,960.23.

The lackluster performance on Wall Street partly reflected continued uncertainty about the outlook for the markets ahead of the release of some key economic data later in the week.

Traders are likely to keep a close eye on the Labor Department's monthly jobs report, which is scheduled to be released on Thursday due to the holiday on Friday.

Reports on manufacturing and service sector activity, private sector employment, and international trade may also attract some attention in the coming days.

Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing a sharp jump in pending home sales in May.

NAR said its pending home sales index jumped 6.1 percent to 103.9 in May from 97.9 in April, while economists had expected the index to rise by about 1.0 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.

A separate report from MNI Indicators showed that Chicago business activity expanded at a slower than expected pace in the month of June.

MNI said its Chicago business barometer fell to 62.6 in June from 65.5 in May. While a reading above 50 indicates continued growth, economists had expected the barometer to edge to down to 64.0.

Among individual stocks, shares of MannKind (MNKD) moved sharply higher on the day after the biopharmaceutical company received FDA approval for its inhalable diabetes treatment Afrezza.

Online media giant Yahoo (YHOO) also moved to the upside on the day after Piper Jaffray upgraded its rating on the company's stock to Overweight from Neutral.

On the other hand, shares of American Apparel (APP) came under pressure on news that the retailer has adopted a so-called "poison pill" as it battles with ousted chief executive and founder Dov Charney.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lack of direction shown by the broader markets.

Gold stocks moved notably higher over the course of the session, however, with the NYSE Arca Gold Bugs Index advancing by 1.6 percent. With the gain, the index reached its best closing level in well over three months.

The strength among gold stocks came amid a modest increase by the price of gold, as gold for April delivery climbed $2 to $1,322 an ounce.

Significant strength was also visible among semiconductor stocks, as reflected by the 1.1 percent gain posted by the Philadelphia Semiconductor Index. Micron Technology (MU) helped lead the sector higher, surging up by 4.6 percent.

Utilities, natural gas, and oil service stocks also saw some strength on the day, while airline and defense stocks saw moderate weakness.

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 rose by 0.4 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

The major European markets also ended the day mixed. While the German DAX Index crept up by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries moved modestly higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.6 basis points to 2.516 percent.

Looking Ahead

Trading on Tuesday could be impacted by reaction to reports on national manufacturing activity and construction spending.