Stocks Close Firmly Negative After Seeing Initial Strength - U.S. Commentary

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(RTTNews.com) - After failing to sustain an initial upward move, stocks moved mostly lower over the course of the trading session on Monday. The major averages pulled back into negative territory following the mixed performance seen last Friday.

Going into the close, the major averages saw further downside, ending the session firmly in the red. The Dow fell 148.04 points or 0.6 percent to 24,163.15, the Nasdaq slid 53.53 points or 0.8 percent to 7,066.27 and the S&P 500 slumped 21.86 points or 0.8 percent to 2,648.05.

The lower close on Wall Street came as traders looked ahead to several key events later this week, including the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Traders are also likely to keep an eye on the latest economic data, including the Labor Department's closely watched economic report due on Friday.

If that were not enough for traders to digest, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are due to travel to Beijing next week to hold trade talks with Chinese officials.

On the U.S. economic front, the Commerce Department released a report showing personal income increased by slightly less than expected in the month of March.

The report said personal income rose by 0.3 percent in March, matching the downwardly revised increase in February. Economists had expected income to climb by 0.4 percent.

Meanwhile, the Commerce Department said personal spending climbed by 0.4 percent in March after coming in unchanged in the previous month. The increase in spending matched economist estimates.

A separate report from the National Association of Realtors showed pending home sales increased by less than expected in the month of March.

NAR said its pending home sales index rose by 0.4 percent to 107.6 in March from a downwardly revised 107.2 in February. Economists had expected pending home sales to climb by 0.9 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

Gold stocks showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2 percent.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for June delivery sliding $4.20 to $1,319.20 an ounce.

Considerable weakness was also visible among housing stocks, as reflected by the 1.7 percent drop by the Philadelphia Housing Sector Index. With the decrease, the index ended the session at its lowest closing level in six months.

Telecom, biotechnology, and computer hardware stocks also saw notable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher in light trading, as markets in Japan and mainland China were closed for holidays. Hong Kong's Hang Seng Index surged up by 1.7 percent, while Australia'sS&P/ASX 200 Index rose by 0.5 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index rose by 0.3 percent and the U.K.'s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries moved higher, extending the rebound seen over the course of the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.1 basis points to 2.936 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on activity in the manufacturing sector and construction spending.

On the earnings front, Rent-A-Center (RCII), Tenet Healthcare (THC) and Texas Roadhouse (TXRH) are among the companies releasing their quarterly results after the close of today's trading.

Aetna (AET), Hanesbrands ( HBI ), Merck (MRK), and Pfizer (PFE) are also among the companies due to report their results before the start of trading on Tuesday.

Read the original article on RTTNews (http://www.rttnews.com/2888428/stocks-close-firmly-negative-after-seeing-initial-strength-u-s-commentary.aspx)

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This article appears in: Stocks , World Markets , Politics
Referenced Symbols: HBI ,

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