Stocks Seeing Modest Strength Amid Light Trading Activity - U.S. Commentary

(RTTNews) - While buying interest has remained subdued, stocks are seeing modest strength in mid-day trading on Monday. The slim gains on the day are extending the upward trend shown by the markets over the past two weeks.

The major averages have moved roughly sideways in recent trading, hovering just above the unchanged line. The Dow is up 8.34 points or 0.1 percent at 18,062.05, the Nasdaq is up 5.17 points or 0.1 percent at 4,821.03 and the S&P 500 is up 4.43 points or 0.2 percent at 2,093.20.

The modest strength that has emerged on Wall Street partly reflects the recent upward momentum for the markets, which has lifted the Dow and the S&P 500 to record highs.

Stocks have trended higher since the Federal Reserve said in a statement issued earlier this month that it would be patient in beginning to normalize the stance of monetary policy.

Traders seem to have interpreted the remark as an indication that the Fed will be cautious in its decision to begin raising interest rates.

Continued signs of strength in the economy have also contributed to the recent positive sentiment, as the U.S. continues to outperform many of the other major developed nations.

Nonetheless, traders seem reluctant to make more significant moves amid a lack of major U.S. economic data on the day.

Reports on consumer confidence, pending home sales, and manufacturing activity are due to be released later in the week, but trading activity is likely to remain light ahead of New Year's Eve and the New Year's Day holiday.

Sector News

Many of the major sectors are showing only modest moves on the day, although considerable strength is visible among natural gas stocks. Reflecting the strength in the sector, the NYSE Arca Natural Gas Index is advancing by 1.4 percent.

The gains by natural gas stocks come as natural gas for February delivery is climbing $0.066 to $3.099 per million BTUs.

Utilities stocks are also turning in a strong performance on the day, as reflected by the 1.1 percent gain being posted by the Dow Jones Utilities Average. With the gain, the average has risen to a new record intraday high.

While strength is also visible among steel, banking, and oil service stocks, gold stocks have moved to the downside along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index surged up by 1.8 percent and 1.4 percent, respectively. However, Japan's Nikkei 225 Index bucked the uptrend and fell by 0.5 percent.

The major European markets all moved higher over the course of the session. While the German DAX Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries have moved to the upside, extending the modest upward move seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.8 basis points at 2.202 percent.