Stocks Move Mostly Lower After Massacre In Orlando - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks moved mostly lower over the course of the trading session on Monday. With the drop on the day, the S&P 500 pulled back further off last Wednesday's ten-month closing high.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow fell 132.86 points or 0.7 percent to 17,732.48, the Nasdaq slumped 46.11 points or 0.9 percent to 4,848.44 and the S&P 500 slid 17.01 points or 0.8 percent to 2,079.06.

The weakness on Wall Street came as traders reacted to the mass shooting in a nightclub in Orlando over the weekend, which left 50 people dead.

The attack has raised some concerns about the economy amid worries that Americans may be more reluctant to enjoy the nightlife.

Concerns about Britain leaving the European Union also weighed on the markets ahead of next week's referendum on the so-called Brexit.

Trading activity was somewhat subdued, however, with traders looking ahead to the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement.

While the Fed announcement will be the main focus this week, traders will also be presented with a slew of U.S. economic data.

The reports on retail sales, industrial production, housing starts and producer and consumer price inflation could impact the outlook for future Fed decisions.

Despite the drop by the broader markets, shares of LinkedIn (LNKD) moved sharply higher after the company agreed to be acquired by Microsoft (MSFT) in an all-cash transaction valued at $26.2 billion.

Sector News

Airline stocks showed a significant move to the downside on the day, dragging the NYSE Arca Airline Index down by 2.7 percent. The index continued to give back ground after reaching its highest closing level in over a month last Thursday.

The weakness among airline stocks reflected concerns that the mass shooting in Orlando over the weekend will lead to reduced travel.

Significant weakness also emerged among housing stocks, as reflected by the 2.1 percent loss posted by the Philadelphia Housing Sector Index. M/I Homes (MHO) and Hovnanian (HOV) posted considerable losses.

Biotechnology, electronic storage, chemical and software stocks also saw notable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index plunged by 3.5 percent, while Hong Kong's Hang Seng Index tumbled by 2.5 percent.

The major European markets also came under pressure on the day. While the U.K.'s FTSE 100 Index slumped by 1.2 percent, the German DAX Index and the French CAC 40 Index plummeted by 1.8 percent and 1.9 percent, respectively.

In the bond market, treasuries moved moderately higher as the day progressed, extending a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.3 basis points to 1.616 percent.

Looking Ahead

Reports on retail sales, import and export prices, and business inventories may attract attention on Tuesday, but trading activity is likely to remain light as the Fed's two-day meeting gets underway.