Stocks Showing A Lack Of Direction Following Recent Strength - U.S. Commentary

(RTTNews) - Stocks have fluctuated over the course of the trading day on Monday after failing to sustain an initial upward move. The major averages have spent much of the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 2.17 points or 0.1 percent at 3,983.80, the Dow is up 49.73 points or 0.3 percent at 16,011.43 and the S&P 500 is up 1.14 points or 0.1 percent at 1,799.32.

While stocks initially benefited from the recent upward momentum for the markets, buying interest waned not long after the open.

Traders seemed reluctant to continue buying stocks after the early gains lifted the Dow and the S&P 500 above key psychological levels at 16,000 and 1,800, respectively.

Profit taking contributed to a subsequent pullback by the markets, but the selling pressure has also faded since then as traders take a breather.

On the economic front, the National Association of Home Builders released a report showing that homebuilder confidence held steady in the month of November.

The report said the NAHB/Wells Fargo Housing Market Index came in at 54 in November, unchanged from the downwardly revised reading for October.

Economists had expected the index to come in unchanged compared to the 55 originally reported for the previous month.

Among individual stocks, shares of Boeing (BA) have moved to the upside after the aerospace giant booked $100 billion in orders at the opening of the Dubai Airshow.

Meat processor Tyson Foods (TSN) is also moving higher after reporting fourth quarter earnings that came in slightly above analyst estimates.

On the other hand, shares of Microsoft (MSFT) have come under pressure after Bank of America/Merrill Lynch downgraded its rating on the software giant to Underperform from Neutral.

Sector News

Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Gold stocks are seeing considerable weakness on the day, however, with the NYSE Arca Gold Bugs Index falling by 1.5 percent.

The weakness in the gold sector comes amid a notable decrease by the price of the precious metal, as gold for December delivery is sliding $14.40 to $1,273 an ounce.

Meanwhile, defense stocks have shown a strong move to the upside, driving the Philadelphia Defense Sector Index up by 1.2 percent. A strong gain by Embraer (ERJ) has helped lift the index to a record intraday high.

Notable strength is also visible among banking stocks, as reflected by the 1.1 percent gain by the Dow Jones Banking Index. With the gain, the index has reached its best intraday level in over three months.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index surged up by 2.7 percent and 2.9 percent, respectively amid news of comprehensive economic reforms in China.

The major European markets also moved to the upside. While the U.K.'s FTSE 100 Index rose by 0.5 percent, the German DAX Index and the French CAC 40 Index advanced by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries are moving moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 2.676 percent.