Stocks Close Modestly Lower After Lackluster Trading Day - U.S. Commentary

(RTTNews) - After failing to sustain an early upward move, stocks fluctuated over the course of the trading day on Monday before closing modestly lower. The losses on the day partly offset the strong upward move seen last Friday.

The major averages ended the day in the red but well off their lows for the session. The Dow edged down 17.78 points or 0.1 percent to 16,991.91, the Nasdaq fell 20.82 points or 0.5 percent to 4,454.80 and the S&P 500 slipped 3.08 points or 0.2 percent to 1,964.82.

The initial strength on Wall Street partly reflected the positive reaction to last Friday's much better than expected September jobs report.

The report showed stronger than expected job growth during the month, helping to push the unemployment rate down to its lowest level in over six years.

While the report points to strength in the economy, analysts have suggested that subdued wage growth is likely to keep the Federal Reserve from jumping the gun on raising interest rates.

Buying interest waned not long after the open, however, as traders seemed reluctant to push the markets higher amid a lack of major U.S. economic data.

The subsequent pullback by the markets was partly due to profit taking as well as lingering geopolitical concerns amid ongoing conflicts overseas.

Despite the downturn by the broader markets, tech giant Hewlett-Packard (HPQ) managed to end the day up by 4.7 percent

The advance by HP came after the company announced plans to separate into two new publicly traded companies. HP said one company will include its personal computer and printer businesses, while the other will consist of its corporate hardware and services operations.

Shares of CareFusion (CFN) also turned in a strong performance after the medical device maker agreed to be acquired by Becton Dickinson (BDX) for $58 per share in cash and stock or a total of $12.2 billion.

On the other hand, Alcobra (ADHD) showed a steep drop on the day after the biopharmaceutical company's ADHD treatment failed a key study.

Sector News

While many of the major sectors ended the day showing only modest moves, significant weakness was visible among electronic storage stocks. The NYSE Arca Disk Drive Index fell by 1.9 percent to its lowest closing level in almost two months.

Hutchinson Technology (HTCH) and SanDisk (SNDK) turned in two of the storage sector's worst performances, tumbling by 5.2 percent and 2.7 percent, respectively.

Biotechnology stocks also came under considerable selling pressure, dragging the NYSE Arca Biotechnology Index down by 1.5 percent. ImmunoGen (IMGN) helped to lead the sector lower, plunging by 8 percent to a three-year closing low.

Transportation and networking stocks also saw notable weakness on the day, while gold stocks showed a strong move back to the upside along with the price of the precious metal.

With gold for December delivery climbing $14.40 to $1,207.30 an ounce, the NYSE Arca Gold Bugs Index jumped by 2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index jumped by 1.2 percent and 1.1 percent, respectively, while Australia's All Ordinaries Index dropped by 0.4 percent.

Meanwhile, the major European markets all closed higher but well off their best levels of the day. While the U.K.'s FTSE 100 Index rose by 0.6 percent, the German DAX Index and the French CAC 40 Index edged up by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries moved modestly higher over the course of the trading session after initially showing a lack of direction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.425 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading activity is likely to remain relatively subdued on Tuesday.