Stocks Manage To End Choppy Trading Day Mostly Higher - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading session on Monday before ending the day mostly higher. The gains on the day extended the upward move seen over the past few sessions.

The major averages all closed in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq advanced 22.31 points or 0.5 percent to 4,148.17, the Dow inched up 7.71 points or 0.1 percent to 15,801.79 and the S&P 500 edged up 2.82 points or 0.2 percent to 1,799.84.

The choppy trading seen for most of the trading day came as investors continued to digest last Friday's monthly jobs report amid a lack of new U.S. economic data.

While the jobs report showed a much smaller than expected increase in non-farm payroll employment in January, a jump in employment as measured by the household survey pushed the unemployment rate down to a new five-year low.

Traders were also looking ahead to remarks from new Federal Reserve Chair Janet Yellen, who is scheduled to testify before the House Financial Services Committee on Tuesday in her first public comments since taking over as head of the central bank.

Yellen's remarks are likely to be closely scrutinized for any indications regarding the outlook for the Fed's tapering of its asset purchase program.

Later in the week, trading could be impacted by a separate appearance from Yellen before the Senate Banking Committee along with reports on retail sales, industrial production, and consumer sentiment.

Among individual stocks, shares of AutoNavi (AMAP) moved sharply higher after Alibaba offered to acquire the digital map content provider for $21 per share in cash. The offer represents a 27 percent premium to AutoNavi's closing price on Friday.

Toy maker Hasbro (HAS) also showed a notable move to the upside after reporting weaker than expected fourth quarter results but still raising its quarterly cash dividend by 8 percent to $0.43 per share.

Meanwhile, shares of McDonald's (MCD) came under pressure even though the fast food giant reported a 1.2 percent increase in global comparable sales in January. Strong sales growth overseas offset weather-related weakness in the U.S.

Sector News

While many of the major sectors ended the day showing only modest moves, substantial strength was visible among gold stocks. The NYSE Arca Gold Bugs Index surged up by 3.1 percent to its best closing level in almost three months.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for April delivery climbing $11.80 to $1,274.70 an ounce.

Biotechnology and computer hardware stocks also saw significant strength on the day, contributing to the advance by the tech-heavy Nasdaq.

Meanwhile, steel stocks came under considerable selling pressure, dragging the NYSE Arca Steel Index down by 1.6 percent. The pullback by the index came after it closed higher for four straight days.

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 surged up by 1.8 percent, while Hong Kong's Hang Seng Index ended the day down by 0.3 percent.

The major European markets also ended the day mixed. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries showed a lack of direction for much of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.678 percent.

Looking Ahead

Tuesday's trading is likely to be driven by reaction to Yellen's testimony, which is likely to overshadow a report on wholesale inventories.

On the earnings front, Sprint (S), CVS Caremark (CVS), and Dean Foods (DF) are among the companies due to report their quarterly results before the start of trading on Tuesday.