U.S. Stocks Give Back Ground After Early Move To The Upside

(RTTNews) - After an early move to the upside, stocks have given back ground over the course of the trading session on Monday. The major averages have pulled back well off their highs of the session and into negative territory.

Currently, the major averages are all in the red, although the tech-heavy Nasdaq is down just 1.36 points or less than a tenth of a percent at 16,378.10. The S&P 500 is down 12.78 points or 0.2 percent at 5,241.57 and the Dow is down 223.37 points or 0.6 percent at 39,584.00.

The early strength on Wall Street came as traders finally had an opportunity to react to the closely watched U.S. consumer price inflation data that was released while the markets were closed for Good Friday.

The Commerce Department report said the annual rate of consumer price growth ticked up to 2.5 percent in February from 2.4 percent in January, in line with estimates.

Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.8 percent in February from an upwardly revised 2.9 percent in January.

Economists had expected the pace of core price growth to come in unchanged compared to the 2.8 percent originally reported for the previous month.

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending in February.

The subsequent pullback by stocks came as a report from the Institute for Supply Management unexpectedly showing modest growth in U.S. manufacturing activity in the month of March contributed to a jump by Treasury yields.

The ISM said its manufacturing PMI jumped to 50.3 in March from 47.8 in February, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 48.4.

With the much bigger than expected increase, the index returned to expansion territory for the first time since September 2022.

Sector News

Telecom stocks have come under considerable selling pressure over the course of the session, dragging the NYSE Arca North American Telecom Index down by 1.4 percent.

Shares of AT&T (T) have fallen by 1.3 percent after the telecom giant said it has determined a data set released on the dark web approximately two weeks ago impacted approximately 7.6 million current AT&T account holders and approximately 65.4 million former account holders.

Interest rate-sensitive commercial real estate and utilities stocks have also moved to the downside, with the Dow Jones U.S. Real Estate Index and the Dow Jones Utility Average falling by 1.3 percent and 1.2 percent, respectively.

Pharmaceutical, healthcare and brokerage stocks have also moved notably lower, while strength remains visible among computer hardware, gold and semiconductor stocks.

Among semiconductor stocks, Micron Technology (MU) has surged by 6.5 percent after Bank of America raised its price target on the company's stock to $144 per share from $120 per share.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with several major markets closed for holidays. Japan's Nikkei 255 Index tumbled by 1.4 percent, while China's Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets were all closed on the day for Easter Monday.

In the bond market, treasuries have moved sharply lower in reaction to the latest U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.9 basis points at 4.315 percent.