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

(RTTNews) - After coming under pressure in early trading on Monday, stocks regained some ground over the course of the session but still ended the day mostly lower. Traders generally showed a lack of conviction amid a relatively quiet news day.

The major averages climbed well off their lows for the session but still finished the day in the red. The Dow dipped 34.04 points or 0.2 percent to 16,418.68, the Nasdaq edged down 1.77 points or less than 0.1 percent to 4,334.45 and the S&P 500 slipped 0.87 points or 0.1 percent to 1,877.17.

The early weakness on Wall Street came following the release of disappointing Chinese trade data, with a report from the Chinese General Administration of Customs showing that China swung to a trade deficit in February.

With Chinese exports falling 18.1 percent year-over-year in February compared to a 10.1 percent increase in imports, the report showed a trade deficit of nearly $23 billion compared to a surplus of $31.9 billion in the same month last year.

Combining the data for January and February to smooth out the volatility caused by the Lunar New Year holidays showed that exports fell 1.6 percent but imports rose 10 percent, resulting in a 79.1 percent drop in the trade surplus to $8.89 billion.

The data contributed to a significant sell-off by Chinese stocks, with the Shanghai Composite Index plunging by 2.9 percent.

Nonetheless, traders seemed reluctant to make any significant moves amid a lack of major U.S. economic data following the slew of data released last week.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "In the U.S., the important economic data of the week doesn't come until Thursday's retail sales and Friday's PPI, and with commodity prices at the highest level since October '12, inflation numbers should now be a focus."

A notable drop by shares of Boeing (BA) weighed on the day, with the aerospace giant falling by 1.3 percent. Late Friday, Boeing announced that cracks had been discovered in the wings of 787 Dreamliner jets still in production.

Sector News

While most of the major sectors ended the day showing only modest moves, considerable weakness remained visible among steel stocks. The NYSE Arca Steel Index fell 1.7 percent to its lowest closing level in a month.

Housing stocks also came under pressure, dragging the Philadelphia Housing Sector Index down by 1.4 percent. KB Home (KBH) and Meritage Homes (MTH) turned in two of the sector's worst performances.

Defense and gold stocks also moved to the downside on the day, while some strength emerged among tobacco stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness during trading on Monday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index tumbled by 1.8 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index inched up by 0.1 percent, German DAX Index dropped by 0.9 percent and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries showed a lack of direction throughout the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.784 percent.

Looking Ahead

Tuesday represents another relatively light day in terms of U.S. economic news, although the Commerce Department is scheduled to release its monthly report on wholesale inventories.

On the earnings front, American Eagle Outfitters (AEO) and Dick's Sporting Goods (DKS) are among the companies due to report their quarterly results before the start of trading on Tuesday.