U.S. Stocks Finish Lackluster Session Modestly Higher
Stocks showed a lack of direction throughout the trading session on Monday, with the major averages spending the day bouncing back and forth across the unchanged line after last Friday’s trading firmly in positive territory.
The major averages moved to the upside going into the close, ending the day modestly higher. The Dow rose 100.24 points or 0.3 percent to 35,559.53, the Nasdaq crept up 29.37 points or 0.2 percent to 14,346.02 and the S&P 500 inched up 6.73 points or 0.2 percent to 4,588.96.
Traders seemed reluctant to make significant moves as they await the release of key economic data in the coming days, including the closely watched monthly jobs report on Friday.
Reports on initial jobless claims, factory orders and manufacturing and service sector activity could also impact trading.
With the Federal Reserve indicating future interest rate decisions, upcoming economic data may attract more attention than usual.
“Many traders won’t do much positioning until Friday’s NFP report, which should show the labor market remains tight,” said Edward Moya, senior market analyst at OANDA. “The key for the payroll report might be what is happening with wages, as it seems fears of an acceleration of inflation have been downsized.”
He added, “This week also includes the ISM reports which should show manufacturing activity is picking up and the service sector is cooling.”
In U.S. economic news, MNI Indicators released a report showing Chicago-area business activity contracted at a slightly slower rate in the month of July.
MNI Indicators said its Chicago business barometer inched up to 42.8 in July from 41.5 in June, although a reading below 50 still indicates a contraction. Economists had expected the index to rise to 43.0.
Most of the major sectors showed only modest moves on the day, contributing to the lackluster close by the broader markets.
Energy stocks saw considerable strength, however, with a sharp increase by the price of crude oil contributing to the strength in the sector.
With crude for September delivery jumping $1.22 to $81.80 a barrel, the Philadelphia Oil Service Index surged by 2.1 percent and the NYSE Arca Oil Index jumped by 1.6 percent.
An increase by the price of gold also contributed to strength among gold stocks, as reflected by the 2.0 percent gain posted by the NYSE Arca Gold Bugs Index.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets ended the day narrowly mixed. While the German DAX Index edged down by 0.1 percent, the U.K.’s FTSE 100 Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.3 percent.
In the bond market, treasuries fluctuated over the course of the session before closing slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 3.959 percent.
Trading on Tuesday may be impacted by reaction to reports on manufacturing activity, construction spending and job openings.
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