Stocks Give Back Ground After Seeing Initial Strength - U.S. Commentary

(RTTNews) - After initially moving to the upside, stocks have given back some ground over the course of the trading session on Monday. The major averages have pulled back off their highs of the session, with the Nasdaq and the S&P 500 briefly dipping below the unchanged line.

Currently, the major averages are all in positive territory. The Dow is up 141.15 points or 0.6 percent at 23,203.55, the Nasdaq is up 22.15 points or 0.3 percent at 6,606.67 and the S&P 500 is up 6.94 points or 0.3 percent at 2,492.68.

The initial strength on Wall Street was partly due to optimism about a potential U.S.-China trade deal following comments from President Donald Trump.

In a post on Twitter on Saturday, Trump he had a "long and very good" telephone call with Chinese President Xi Jinping.

"Deal is moving along very well," Trump tweeted. "If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!"

While tweet generated some positive sentiment, skepticism about the likelihood of a long-term trade deal between the U.S. and China remains.

Traders also seem reluctant to make more significant moves amid a lack of major U.S. economic data, with some traders away from their desks ahead of the New Year's Day holiday on Tuesday.

Reflecting the lackluster performance by the broader markets, most of the major sectors are showing only modest moves in mid-day trading.

Tobacco stocks have shown a substantial move to the downside, however, with the NYSE Arca Tobacco Index plunging by 2.4 percent.

Significant weakness has also emerged among oil service stocks, as reflected by the 1.3 percent drop by the Philadelphia Oil Service Index.

Commercial real estate and housing stocks are also seeing considerable weakness, while biotechnology and retail stocks have shown strong moves to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with many markets across the region closed for New Year's Eve. Hong Kong's Hang Seng Index surged up by 1.3 percent, while Australia's S&P/ASX 200 Index slipped by 0.1 percent.

The major European markets also ended the day mixed, although several markets were closed. While the U.K.'s FTSE 100 Index edged down by 0.1 percent in an abbreviated trading session, the French CAC 40 Index jumped by 1.1 percent.

In the bond market, treasuries have moved to the upside after ending last Friday's trading roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 2.707 percent.