U.S. Stocks Pull Back Off Best Levels But Remain Mostly Positive

(RTTNews) - After moving sharply higher early in the session, stocks have given back ground over the course of the trading day on Monday. The major averages have pulled back well off their highs of the session but remain in positive territory.

The major averages have moved back to the upside in recent trading but remain off their best levels. The Dow is up 159.21 points or 0.5 percent at 32,976.13, the Nasdaq is up 114.16 points or 1.0 percent at 11,509.10 and the S&P 500 is up 25.97 points or 0.7 percent at 3,996.01.

The early rally on Wall Street partly reflected bargain hunting, as some traders looked to pick up stocks at reduced levels following the steep drop seen last week.

The sell-off seen last Friday dragged the Dow down to a two-month closing low, while the S&P 500 tumbled to its lowest closing level in over a month.

For the holiday-shortened week, the S&P 500 dove by 2.7 percent, while the Dow and the Nasdaq plummeted by 3.0 percent and 3.3 percent, respectively.

However, buying interest has waned somewhat since then, as traders continue to express concerns about the outlook for interest rates.

Recent economic data has led to worries the Federal Reserve will raise rates more than currently anticipated and hold rates at an elevated level for an extended period.

On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new orders for durable goods in the month of January.

The report said durable goods orders plunged by 4.5 percent in January after surging by a downwardly revised 5.1 percent in December.

Economists had expected durable goods orders to tumble by 4.0 percent compared to the 5.6 percent spike that had been reported for the previous month.

The steep drop by durable goods orders came as orders for transportation equipment plummeted by 13.3 percent in January after soaring by 15.8 percent in December.

Excluding orders for transportation equipment, durable goods orders climbed by 0.7 percent in January after falling by 0.4 percent in December. Economists had expected a 0.1 percent uptick.

Meanwhile, the National Association of Realtors released a separate report showing pending home sales in the U.S. spiked by much more than expected in the month of January.

NAR said its pending home sales index soared by 8.1 percent to 82.5 in January after jumping by 1.1 percent to a downwardly revised 76.3 in December.

Economists had expected pending home sales to advance by 1.0 percent compared to the 2.5 percent surge originally reported for the previous month.

Sector News

Oil service stocks have moved sharply higher over the course of the session, resulting in a 1.8 percent jump by the Philadelphia Oil Service Index.

The strength among oil service stocks comes despite a decrease by the price of crude oil, as crude for April delivery is falling $0.63 to $75.69 a barrel.

Considerable strength also remains visible among transportation stocks, with the Dow Jones Transportation Average climbing by 1.8 percent.

Union Pacific (UNP) continues to post a standout gain after the railroad said it expects to name a successor to CEO Lance Fritz later this year.

Steel stocks also continue to turn in a strong performance in afternoon trading, driving the NYSE Arca Steel Index up by 1.6 percent.

Airline, semiconductor and networking stocks are also seeing notable strength, although most of the major sectors have pulled back off their best levels.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index dipped by 0.3 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index surged by 1.5 percent, the German DAX Index jumped by 1.1 percent and the U.K.'s FTSE 100 Index climbed by 0.7 percent.

In the bond market, treasuries have pulled back off their best levels of the day but remain in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 3.928 percent.