U.S. Stocks Recover From Initial Weakness To Close Mostly Higher

(RTTNews) - After showing a notable move to the downside at the start of trading on Monday, stocks showed a significant rebound over the course of the session. The major averages all climbed well off their early lows and into positive territory.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 68.50 points or 0.2 percent to 28,703.38, the Nasdaq advanced 50.70 points or 0.6 percent to 9,071.47 and the S&P 500 climbed 11.43 points or 0.4 percent to 3,246.28.

The initial weakness on Wall Street came as rising geopolitical tensions continued to weigh on the markets after contributing to the pullback off record highs seen last Friday.

Washington and Tehran continue to engage in an escalating war of words after the U.S. killing of top Iranian military commander Qasem Soleimani in an airstrike last week.

With Iran's Supreme Leader Ali Khamenei vowing "severe revenge" against the U.S., President Donald Trump threatened to retaliate against any attacks on Americans or American assets.

Trump said the U.S. has targeted 52 Iranian sites to strike if Tehran launches an attack, with the number representing the 52 American hostages held during the Iran hostage crisis.

Meanwhile, Trump also threatened to impose harsh sanctions on Iraq after its parliament passed a resolution calling on U.S. forces to leave the country.

"If they do ask us to leave, if we don't do it in a very friendly basis, we will charge them sanctions like they've never seen before ever," Trump told reporters on Sunday. "It'll make Iranian sanctions look somewhat tame."

Selling pressure waned shortly after the start of trading, however, as traders seem optimistic that the bluster will not amount to much and that tensions will eventually subside without a major impact on the global economy.

A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of the closely watched monthly jobs report on Friday.

Sector News

Energy stocks moved significantly higher on the day as the price of crude oil for February reached its highest level since April only to pare its gains and the day up $0.22 at $63.27 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Oil Index climbed by 1.4 percent and 1.2 percent, respectively.

Notable strength was also visible among biotechnology stocks, as reflected by the 1 percent gain posted by the NYSE Arca Biotechnology Index.

On the other hand, tobacco and semiconductor stocks remained firmly in negative territory despite the recovery by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index plunged by 1.9 percent, while Hong Kong's Hang Seng Index slid by 0.8 percent.

The major European markets also moved to the downside on the day. While the German DAX Index fell by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index dropped by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 1.811 percent after hitting a low of 1.766 percent.

Looking Ahead

Reports on the U.S. trade deficit, service sector activity and factory orders may attract some attention on Tuesday, although traders are also likely to keep an eye out for news out of the Middle East.