Stocks Seeing Modest Weakness As Fed Decision Looms - U.S. Commentary

(RTTNews) - After turning in a strong performance last week, stocks are seeing modest weakness in early trading on Monday. The major averages have all moved to the downside, although selling pressure has remained relatively subdued.

Currently, the major averages remain in the red but are off their lows for the young session. The Dow is down 40.82 points or 0.3 percent at 16,392.27, the Nasdaq is down 14.43 points or 0.3 percent at 4,807.92 and the S&P 500 is down 5.39 points or 0.3 percent at 1,955.66.

The early weakness on Wall Street comes amid uncertainty ahead of the Federal Reserve's two-day monetary policy meeting later this week.

The Fed is scheduled to announce its policy decision Thursday afternoon, although analysts remain split regarding whether the central bank will raise interest rates.

While upbeat economic data points to the first rate hike in nearly a decade, the recent market volatility and concerns about developing economies may keep the Fed on hold.

Ahead of the meeting, traders are likely to keep an eye on key reports on retail sales, industrial production, consumer prices, and housing starts, which could impact the Fed's decision.

There are no major U.S. economic reports due to be released today, however, keeping some traders on the sidelines.

Over the weekend, China released some disappointing data, leading to speculation that the Chinese government may provide additional stimulus.

Most of the major sectors are showing only modest moves on the day, although steel stocks have fallen sharply amid worries about the Chinese economy.

Reflecting the weakness in the steel sector, the NYSE Arca Steel Index has tumbled by 2.2 percent. Allegheny Technologies (ATI) and Cliffs Natural Resources (CLF) are posting notable losses.

Energy, chemical, and telecom stocks have also moved lower, while modest strength has emerged among utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

The major European markets have also turned mixed on the day. While the German DAX Index has advanced by 0.3 percent, the French CAC 40 Index is nearly unchanged and the U.K.'s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries are seeing modest strength due to their appeal as a safe haven ahead of the Fed decision. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.172 percent.