Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - Following the sell-off seen last week, stocks showed a lack of direction over the course of the trading day on Monday. The major averages spent the day bouncing back and forth across the unchanged line, unable to sustain any significant moves.

The major averages eventually ended the session mixed. While the Nasdaq edged down 5.64 points or 0.1 percent to 4,637.99, the Dow rose 52.12 points or 0.3 percent to 16,398.57 and the S&P 500 inched up 1.64 points or 0.1 percent to 1,923.67.

The choppy trading on Wall Street came as traders expressed some uncertainty about the outlook for the markets following recent weakness.

The steep drop seen in recent sessions has pulled the major averages down to their lowest levels in three months.

Traders seemed reluctant to get back into the markets, however, with ongoing concerns about the global economy limiting any bargain hunting.

The lack of major U.S. economic released on the day may also have made traders reluctant to make any significant moves.

The economic calendar is relatively quiet for much of the week, although several key reports are scheduled to be released on Friday.

Traders are likely to keep an eye on reports on retail sales, producer price inflation, industrial production, and consumer sentiment.

Aluminum giant Alcoa (AA) is also scheduled to release its fourth quarter results after the close of today's trading, marking the unofficial start of earnings season.

JP Morgan (JPM), Intel (INTC), Citigroup (C), and Wells Fargo (WFC) are due to report their quarterly results later in the week.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Gold stocks saw substantial weakness, however, resulting in a 4 percent drop by the NYSE Arca Gold Bugs Index. With the loss, the index pulled back further off the two-month closing high set last Thursday.

The sell-off by gold stocks came amid a decrease by the price of the precious metal, with gold for February delivery sliding $1.70 to $1,096 an ounce.

Significant weakness was also visible among biotechnology stocks, as reflected by the 4 percent loss posted by the NYSE Arca Biotechnology Index. The decrease pulled back the index down to its lowest closing level in over three months.

Qiagen (QGEN) helped lead the biotech sector lower, tumbling by 9.5 percent after the genetic testing specialist warned of weaker than expected full year results.

Energy, electronic storage, and trucking stocks also saw considerable weakness, while tobacco, telecom and commercial real estate stocks showed strong moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness on Monday, although the Japanese markets were closed for a holiday. Hong Kong's Hang Seng Index slumped by 2.8 percent, while China's Shanghai Composite Index plunged by 5.3 percent.

The major European markets also moved to the downside on the day. While the German DAX Index dipped by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries gave back some ground after seeing considerable strength over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 2.158 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to Alcoa's fourth quarter results.