U.S. Stocks Climb Well Off Worst Levels But Remain Modestly Lower

(RTTNews) - After coming under pressure early in the session, stocks have regained some ground over the course of the trading day on Monday. The major averages have climbed well off their worst levels of the day, with the Dow briefly peeking above the unchanged line.

Currently, the Dow is down just 4.14 points or less than a tenth of a percent after falling nearly 240 points in early trading. The S&P 500 is down 11.65 points or 0.2 percent at 5,112.04 and the Nasdaq is down 61.06 points or 0.4 percent at 16,024.05.

The early weakness on Wall Street came amid uncertainty about the outlook for interest rates ahead of the release of key inflation data in the coming days.

The Labor Department is scheduled to release its closely watched report on consumer price inflation in the month of February on Tuesday.

Economists currently expect consumer prices to climb by 0.4 percent in February after rising by 0.3 percent in January.

Core consumer prices, which exclude food and energy prices, are expected to rise by 0.3 percent in February following a 0.4 percent increase in January.

Meanwhile, the annual rate of consumer price growth is expected to come in unchanged from the previous month at 3.1 percent, while annual core consumer price growth is expected to slow to 3.7 percent from 3.9 percent.

The consumer price inflation data could have a significant impact on the outlook for interest rates, with Federal Reserve officials saying they need "greater confidence" inflation is slowing before they consider cutting rates.

While the Fed is widely expected to leave rates unchanged at its monetary policy meeting next week, the data could impact expectations regarding when the central bank will eventually lower rates.

On Thursday, the Labor Department is due to release a separate report on producer price inflation in the month of February.

Producer prices are expected to rise by 0.3 percent in February, matching the increase seen in January, while the annual rate of producer price growth is expected to accelerate to 1.2 percent from 0.9 percent.

Reports on retail sales, industrial production and consumer sentiment are also likely to attract attention in the coming days.

Sector News

Despite the recovery attempt by the broader markets, semiconductor stocks continue to see significant weakness on the day, with the Philadelphia Semiconductor Index falling by 1.6 percent.

Within the sector, semiconductor equipment maker Applied Materials (AMAT) has slumped by 2.5 percent despite raising its quarterly cash dividend from $0.32 to $0.40 per share.

Notable weakness also remains visible among steel stocks, as reflected by the 1.5 percent loss being posted by the NYSE Arca Steel Index.

On the other hand, gold stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.5 percent.

The rally by gold stocks comes amid a modest increase by the price of the precious metal, with gold for April delivery inching up $3.10 to $2,188.60 an ounce.

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 plunged by 2.2 percent, while Hong Kong's Hang Seng Index jumped by 1.4 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index fell by 0.4 percent.

In the bond market, treasuries continue to show a lack of direction after ending last Friday's trading roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, is currently up by less than a basis point at 4.094 percent.