Stocks Pull Back Following Recent Upward Trend - U.S. Commentary

(RTTNews) - Stocks moved mostly lower over the course of the trading session on Monday, partly offsetting the strong gains posted last week.

The major averages finished the day firmly in negative territory. The Dow dipped 54.24 points or 0.3 percent to 19,097.90, the Nasdaq slid 30.11 points or 0.6 percent to 5,368.81 and the S&P 500 fell 11.63 points or 0.5 percent at 2,201.72.

Profit taking contributed to the weakness on Wall Street on the heels of the upward trend seen in reaction to President-elect Donald Trump's surprise victory earlier this month.

Traders looked to cash in on some of the recent gains, which once again lifted the major averages to new record closing highs last Friday.

Trepidation ahead of a key OPEC meeting later this week also weighed on the markets amid uncertainty about whether the members of the cartel will finalize an agreement on reducing oil production.

Recent optimism about the outcome of the meeting was partly offset by news that Saudi Arabia pulled out of a meeting with non-OPEC oil producing countries.

Nonetheless, trading activity was somewhat subdued ahead of the OPEC meeting on Wednesday as well as the release of the closely watched monthly jobs report on Friday.

Reports on consumer confidence, personal income and spending, pending home sales, and manufacturing activity are also likely to attract attention later this week along with the Federal Reserve's Beige Book.

Sector News

Biotechnology stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 2.4 percent.

Alder BioPharmaceuticals (ALDR), Ocular Therapeutix (OCUL), Celldex (CLDX), and Ophthotech (OPHT) turned in some of the biotech sector's worst performances.

Considerable weakness was also visible among housing stocks, as reflected by the 2 percent drop by the Philadelphia Housing Sector Index. The index pulled back off its best closing level in well over two months.

Financial, energy, and railroad stocks also saw significant weakness, moving lower along with most of the other major sectors.

On the other hand, gold stocks moved sharply higher, driving the NYSE Arca Gold Bugs Index up by 4.6 percent. The strength in the sector came as gold for December delivery climbed $12.40 to $1,190.80 an ounce.

Utilities stocks also turned in a strong performance on the day, resulting in a 1.8 percent advance by the Dow Jones Utilities Average.

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 edged down by 0.1 percent, while Hong Kong's Hang Seng Index climbed by 0.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slumped by 1.1 percent, the French CAC 40 Index slid by 0.9 percent and the U.K.'s FTSE 100 Index fell by 0.6 percent.

In the bond market, treasuries regained some ground following recent weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 5.2 basis points to 2.320 percent.

Looking Ahead

Following today's lack of major U.S. economic data, trading on Tuesday may be impacted by reaction to the second estimate of third quarter GDP as well as a report on consumer confidence.