Stocks Close Nearly Flat Following Choppy Trading Day - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout the trading session on Monday as traders slowly returned to work following the long Easter weekend. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session mixed. While the Nasdaq edged down 6.72 points or 0.1 percent to 4,766.79, the Dow inched up 19.66 points or 0.1 percent to 17,535.39 and the S&P 500 crept up 1.11 points or 0.1 percent to 2,037.05.

The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets.

Stocks gave back some ground in the previous week, snapping a five-week winning streak that lifted the major averages to their best levels in well over two months.

Traders were also reluctant to make significant moves ahead of the release of some closely watched data in the coming days, including the monthly jobs report on Friday.

Federal Reserve Chair Janet Yellen is also scheduled to deliver a speech to the Economic Club of New York on Tuesday, potentially shedding some light on the outlook for interest rates.

Recent remarks by Fed officials have increased speculation that the Fed could raise interest rates at its next meeting in April.

Before the start of trading, the Commerce Department released a report showing a slightly bigger than expected increase in personal income in the month of February.

The report said personal income rose by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected income to tick up by 0.1 percent.

The Commerce Department also said personal spending inched up by 0.1 percent in February, matching the downwardly revised uptick seen in the previous month.

The slight increase in spending matched economist estimates, although spending in January was downwardly revised from the originally reported 0.5 percent growth.

A separate report from the National Association of Realtors showed a bigger than expected rebound in pending home sales in February.

NAR said its pending home sales index climbed 3.5 percent to 109.1 in February from a downwardly revised 105.4 in January. Economists had expected the index to increase by about 1.5 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.

Sector News

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

Railroad stocks saw substantial weakness, however, with the Dow Jones Railroads Index tumbling by 2.4 percent. With the drop, the index pulled back further off the well over three-month closing high set earlier this month.

Greenbrier (GBX), Genesee & Wyoming (GWR) and Norfolk Southern (NSC) turned in some of the railroad sector's worst performances.

Notable weakness was also visible among biotechnology stocks, as reflected by the 1.6 percent loss posted by the NYSE Arca Biotechnology Index. Ionis Pharmaceuticals (IONS) helped lead the sector lower, slumping by 8 percent.

On the other hand, airline stocks showed a strong move to the upside on the day, driving the NYSE Arca Airline Index up by 1.3 percent.

Within the airline sector, Virgin America (VA) jumped 10.3 percent after Bloomberg reported the company received takeover offers from JetBlue (JBLU) and Alaska Air Group (ALK).

Other Markets

In overseas trading, Japan's Nikkei 225 Index advanced by 0.8 percent during trading on Monday, while China's Shanghai Composite Index fell by 0.7 percent. Many of the major Asia-Pacific markets were closed for holidays.

Meanwhile, all of the major European markets were closed on the day as a result of Easter Monday holidays.

In the bond market, treasuries moved moderately higher over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3 basis points to 1.87 percent.

Looking Ahead

Yellen's speech will likely be in the spotlight on Tuesday, potentially overshadowing reports on home prices and consumer confidence.