Stocks Finish Lackluster Session Modestly Lower - U.S. Commentary

(RTTNews) - Stocks turned in a relatively lackluster performance throughout the trading day on Monday before ending the session modestly lower. The slight drop on the day partly offset the strong upward move that was seen last week.

The major averages finished the day just below the unchanged line. The Dow edged down 2.58 points or 0.1 percent to 2,086.59, the Nasdaq dipped 31.13 points or 0.2 percent to 17,792.68 and the S&P 500 slipped 2.44 points or 0.1 percent to 5,102.48.

The choppy trading on Wall Street came as many traders stuck to the sidelines on the heels of the volatility seen over the past few weeks.

The Thanksgiving Day holiday on Thursday and the unofficial Black Friday holiday also kept some traders away from their desks.

Nonetheless, traders will be presented with a slew of U.S. economic data in the holiday-shortened week, including reports on new home sales, durable goods orders, and personal income and spending.

The National Association of Realtors released a report this morning showing that existing home sales pulled back by a little more than expected in October.

NAR said existing home sales fell 3.4 percent to an annual rate of 5.36 million in October after surging up 4.7 percent to a rate of 5.55 million in September. Economists had expected sales to drop to a rate of 5.40 million.

Among individual stocks, shares of Diebold (DBD) moved sharply lower on the day after the automated teller machine maker agreed to acquire Germany's Wincor Nixdorf for $1.8 billion in cash and stock.

Drug makers Pfizer (PFE) and Allergan (AGN) also moved to the downside after announcing a merger agreement valued at approximately $160 billion.

On the other hand, shares of Tyson Foods (TSN) moved notably higher after the meat processor reported better than expected fourth quarter sales and provided upbeat guidance.

Sector News

Railroad stocks showed a significant move to the downside on the day, dragging the Dow Jones Railroads Index down by 2.1 percent. The drop by the index came after it ended last Friday's trading at its best closing level in a month.

CSX Corp. (CSX), Genesee & Wyoming (GWR), and FreightCar America (RAIL) turned in some of the railroad sector's worst performances.

Significant weakness also emerged among steel stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca Steel Index. U.S. Steel (X) helped lead the sector lower, tumbling by 8.1 percent.

Semiconductor, utilities and pharmaceutical stocks also saw notable weakness, while considerable strength was visible among biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Hong Kong's Hang Seng Index fell by 0.4 percent, while Australia's All Ordinaries Index rose by 0.4 percent. The Japanese markets were closed for a holiday.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index dipped by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index dropped by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries moved modestly higher over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 2.25 percent.

Looking Ahead

Trading on Tuesday may be impacted by a batch of U.S. economic data, including the revised reading on third quarter GDP as well as reports on international trade, home prices, and consumer confidence.