U.S. Stocks Turning In Lackluster Performance Following Last Week's Rally
Stocks have shown a lack of direction over the course of morning trading on Monday, with the major averages bouncing back and forth across the unchanged line following the rally seen to close out the previous week.
Currently, the major averages are turning in a mixed performance. While the Dow is down 82.09 points or 0.2 percent at 33,680.67, the Nasdaq is up 15.81 points or 0.1 percent at 13,256.57 and the S&P 500 is up 2.04 points or 0.1 percent at 4,284.41.
The choppy trading on Wall Street comes as some traders look to take a break to assess the outlook for the markets following the strong upward move seen last Thursday and Friday.
The rally came amid the passage of legislation raising the U.S. debt ceiling and the release of the closely watched monthly jobs report.
With the surge, the Nasdaq reached its best closing level in well over a year, while the S&P 500 set a new nine-month closing high.
Trading activity may remain somewhat subdued throughout the week as traders look ahead to next week’s Federal Reserve meeting.
The Fed is due to announce its latest monetary policy decision next Wednesday, with the central bank widely expected to pause its recent series of interest rate hikes.
Key inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month.
In U.S. economic news, the Institute for Supply Management released a report showing service sector activity in the U.S. saw only modest growth in the month of May, with the index of activity in the sector falling by more than expected.
The ISM said its services PMI fell to 50.3 in May from 51.9 in April, although a reading above 50 still indicates growth in the sector. Economists had expected the index to edge down to 51.5.
A separate report released by the Commerce Department showed new orders for U.S. manufactured goods increased by slightly less than expected in the month of April.
The report said factory orders rose by 0.4 percent in April after climbing by a downwardly revised 0.6 percent in March.
Economists had expected factory orders to climb by 0.5 percent compared to the 0.9 percent advance originally reported for the previous month.
Sector News
Oil service stocks are giving back ground after surging to close out the previous week, with the Philadelphia Oil Service Index tumbling by 2.2 percent.
The weakness among oil service stocks comes despite an increase by the price of crude oil, as crude for July delivery is climbing $0.43 to $72.17 a barrel.
Significant weakness is also visible among networking stocks, resulting in a 2.1 percent slump by the NYSE Arca Networking Index. The index ended the previous session at its best closing level in well over a month.
Semiconductor, steel and airline stocks are also seeing considerable weakness on the day, while utilities stocks have shown a strong move to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index surged by 2.2 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has slumped by 1.0 percent, the German DAX Index is down by 0.7 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.
In the bond market, treasuries have turned higher over the course of the session after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 3.675 percent.
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