Stocks Close Modestly Higher Following Choppy Trading Day - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading session on Monday but managed to close modestly higher. With the slim gains on the day, the major averages once again reached their best closing levels in well over two months.

The major averages finished the day just above the unchanged line. The Dow edged up 21.57 points or 0.1 percent to 17,623.87, the Nasdaq rose 13.23 points or 0.3 percent to 4,808.87 and the S&P 500 inched up 2.02 points or 0.1 percent to 2,051.60.

The choppy trading seen throughout much of the session came as traders expressed uncertainty about the near-term outlook for the markets on the heels of the recent strength.

The upcoming Easter holiday also contributed the lackluster performance, with some traders away from their desks ahead of the long weekend.

The economic calendar for this week is also relatively quiet compared to the slew of data that was released last week along with the Federal Reserve announcement.

Nonetheless, the National Association of Realtors released a report this morning showing a much steeper than expected pulling back in existing home sales in February.

NAR said existing home sales tumbled 7.1 percent to an annual rate of 5.08 million in February from 5.47 million in January. Economists had expected sales to show a more modest decrease to a rate of 5.31 million.

Reports on weekly jobless claims, new home sales and durable goods orders are also scheduled to be released in the coming days.

Among individual stocks, shares of Valspar (VAL) spiked sharply higher after the paint company agreed to be acquired by rival Sherwin-Williams (SWH) for $9.3 billion in cash.

IHS Inc. (IHS) and Markit (MRKT) also posted strong gains on the day after the companies announced an all-share merger of equals.

Meanwhile, shares of Affymetrix (AFFX) came under pressure after the gene testing company rejected a $1.5 billion takeover offer from Origin Technologies.

On the other hand,

Sector News

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Biotechnology stocks saw considerable strength, however, with the NYSE Arca Biotechnology Index jumping by 1.5 percent. The index climbed further off the one-month closing low set last Thursday.

Biopharmaceutical company Celldex Therapeutics (CLDX) helped to lead the biotech sector higher, surging up by 11.8 percent.

Significant strength was also visible among airline stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Airline Index. With the gain, the index ended the session at its best closing level in almost three months.

On the other hand, natural gas and commercial real estate stocks saw some weakness on the day, although selling pressure was relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index jumped by 2.2 percent, while Australia's All Ordinaries Index fell by 0.3 percent.

Meanwhile, the major European markets all ended the day on the downside. While the French CAC 40 Index dropped by 0.8 percent, the U.K.'s FTSE 100 Index edged down by 0.1 percent and the German DAX Index closed just below the unchanged line.

In the bond market, treasuries gave back some ground after trending higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.2 basis points to 1.923 percent.

Looking Ahead

The economic calendar for Tuesday is relatively quiet, although traders are likely to keep an eye on Markit's preliminary reading on its manufacturing index for March.