Stocks Remain Firmly Negative In Mid-Day Trading - U.S. Commentary

(RTTNews) - After falling sharply in early trading, stocks continue to see considerable weakness in mid-day trading on Monday. With the losses on the day, the major averages have more than offset the modest gains posted last week.

In recent trading, the major averages have climbed off their worst levels of the day, but they remain firmly in the red. The Dow is down 135.52 points or 0.8 percent at 17,712.11, the Nasdaq is down 36.20 points or 0.7 percent at 5,106.07 and the S&P 500 is down 17.24 points or 0.8 percent at 2,074.45.

The weakness on Wall Street comes as resource stocks have come under pressure amid notable decreases in commodities prices.

Energy stocks are seeing considerable weakness, as the price of crude oil for January delivery is tumbling $1.96 to $38.01 a barrel.

The price of crude oil has fallen to its lowest levels in more than six years after OPEC ended its policy meeting without announcing a reduction in production.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index has plummeted by 4.9 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil and & Gas Index have both plunged by 4 percent.

Steel, biotechnology, gold, and chemical stocks are also seeing significant weakness, while airline stocks are among the few groups bucking the downtrend.

Selling pressure may also be due to concerns about the outlook for monetary policy ahead of next week's Federal Reserve meeting.

The Fed is widely expected to announce an increase in interest rates following the meeting, but traders are likely to pay close attention to the wording of the statement.

Fed officials have repeatedly indicated they expect the pace of monetary policy normalization to be gradual due to lingering concerns about the momentum of the U.S. economy.

The economic calendar for this week starts off relatively quiet, although reports on producer prices and retail sales are likely to attract attention later in the week.

The Fed is scheduled to release its report on consumer credit in the month of October this afternoon, although the data typically does not move the 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 advanced by 1 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index dipped by 0.2 percent, the French CAC 40 Index climbed by 0.9 percent and the German DAX Index jumped by 1.3 percent.

In the bond market, treasuries have moved notably higher amid the weakness on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 2.22 percent.