Profit Taking Leads To Pullback On Wall Street

(RTTNews) - Stocks moved mostly lower during trading on Monday, giving back some ground after trending higher over that past several sessions. The Dow and the S&P 500 pulled back off the record closing highs set last Friday.

The major averages finished the day firmly in negative territory. The Dow fell 183.12 points or 0.6 percent to 28,462.14, the Nasdaq dropped 60.62 points or 0.7 percent to 8,945.99 and the S&P 500 slid 18.73 points or 0.6 percent to 3,221.29.

The weakness on Wall Street partly reflected profit taking, with traders cashing in on the recent strength in the markets ahead of the new year.

Trading activity was relatively subdued, however, as some traders remained away from their desks ahead of the New Year's Day holiday on Wednesday.

On the U.S. economic front, MNI Indicators released a report showing Chicago-area business activity continued to contract in the month of December, although the pace of contraction slowed from the previous month.

MNI Indicators said its Chicago business barometer climbed to 48.9 in December from 46.3, but a reading below 50 still indicates a contraction in regional business activity. Economists had expected the barometer to rise to 48.0.

A separate report released by the National Association of Realtors showed pending home sales in the U.S. rebounded in the month of November.

NAR said its pending home sales index jumped 1.2 percent to 108.5 in November after falling by a revised 1.3 percent in October. Economists had expected pending home sales to surge up by 1.1 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Biotechnology stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Biotechnology Index down by 1.2 percent.

Software and semiconductor stocks also moved to the downside on the day, while gold stocks moved sharply higher amid a modest increase by the price of the precious metal.

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 slid by 0.8 percent, while China's Shanghai Composites Index jumped by 1.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slumped by 0.9 percent, the U.K.'s FTSE 100 Index and the German DAX Index slid by 0.8 percent and 0.7 percent, respectively.

In the bond market, treasuries climbed off their worst levels but still ended the day in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 1.895 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on consumer confidence and home prices, although trading activity may be subdued ahead of the New Year's day holiday on Wednesday.