Stocks Move Mostly Lower Amid Partial Government Shutdown - U.S. Commentary

(RTTNews) - Stocks have move significantly lower in morning trading on Monday, extending the sell-off seen over the past several sessions. With the continued drop, the major averages have once again hit their lowest intraday levels in over a year.

Currently, the major averages remain firmly in the red, although the Nasdaq is posting a more modest loss. While the Nasdaq is down 34.20 points or 0.5 percent at 6,298.79, the Dow is down 393.33 points or 1.8 percent at 22,052.04 and the S&P 500 is down 37.81 points or 1.6 percent at 2,378.81.

The continued weakness on Wall Street reflects recent downward momentum, although trading activity is somewhat subdued ahead of the Christmas Day holiday on Tuesday.

Many traders are likely to remain away from their desks to get a head start on the holiday, as the markets are due to close at 1 pm ET.

Nonetheless, today marks the first day traders have an opportunity to react to the partial government shutdown that took effect at midnight last Friday.

The partial shutdown is likely to continue until after Christmas, as President Donald Trump and Democratic lawmakers remain "far apart" on the issue of funding for the president's controversial border wall.

The Senate adjourned Saturday without a deal to re-open the shut down parts of the federal government and is not expected to reconvene until Thursday, December 27th.

The ongoing shutdown comes after Vice President Mike Pence met with Senate Minority Leader Chuck Schumer, D-N.Y., but a spokesman for the Democratic leader said, "Unfortunately, we're still very far apart."

Senate Majority Leader Mitch McConnell, R-Ken., noted party leaders have pushed the "pause button" on holding votes until Trump and Democrats reach an agreement.

The economic calendar for the week starts off quiet due to the holiday on Tuesday, although reports on new home sales, consumer confidence, and pending home sales may attract attention later in the week.

Interest rate-sensitive utilities stocks are seeing substantial weakness on the day, resulting in a 3.9 percent slump by the Dow Jones Utilities Average. The average has tumbled to its lowest intraday level in six months.

Energy, commercial real estate, and pharmaceutical stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

Meanwhile, gold stocks are among the few groups bucking the downtrend, with the NYSE Arca Gold Bugs Index jumping by 2.2 percent. The rally by gold stocks comes amid an increase by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed. China's Shanghai Composite Index rose by 0.4 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets moved lower in a holiday-shortened session. The French CAC 40 Index tumbled by 1.5 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent. Markets in Germany were closed on the day.

In the bond market, treasuries have moved to the upside after ending last Friday's trading roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 2.769 percent.