Uncertainty Ahead Of Fed Leads To Lower Close On Wall Street - U.S. Commentary

(RTTNews) - While selling pressure was somewhat subdued, stocks moved moderately lower during trading on Monday. The losses on the day partly offset the strong performance that was turned in by the markets last week.

The major averages ended the day in the red but off their lows for the session. The Dow fell 62.13 points or 0.4 percent to 16,370.96, the Nasdaq slipped 16.58 points or 0.3 percent to 4,805.76 and the S&P 500 dropped 8.02 points or 0.4 percent to 1,953.03.

The weakness on Wall Street came 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 were 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.

Sector News

Reflecting concerns about the outlook for Chinese demand, steel stocks saw substantial weakness on the day. The NYSE Arca Steel Index tumbled by 2 percent but remains stuck in a recent trading range.

Cliffs Natural Resources (CLF) helped to lead the steel sector lower, extending a recent downward move with an 11.2 percent drop.

Gold stocks also saw significant weakness, dragging the NYSE Arca Gold Bugs Index down by 1.9 percent. The weakness in the sector came even though gold for December delivery climbed $4.40 to $1,107.70 an ounce.

Chemical, energy, and computer hardware stocks also moved notably lower on the day, while most of the other major sectors showed more modest moves to the downside.

Other Markets

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 also ended the day mixed. While the German DAX Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index fell by 0.5 percent and the French CAC 40 Index dropped by 0.6 percent.

In the bond market, treasuries ended the day roughly flat after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.18 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on retail sales, industrial production, and New York manufacturing activity.