U.S. Stocks Give Back Ground After Seeing Early Strength
(RTTNews) - After moving mostly higher early in the session, stocks have given back ground over the course of the trading day on Monday. The major averages have all pulled back well off their highs of the session.
The Dow reached a new record intraday high in early trading but is currently down 3.99 points or less than a tenth of a percent at 34,931.48. Meanwhile, the Nasdaq is up 42.39 points or 0.3 percent at 14,715.06 and the S&P 500 is up 2.60 points or 0.1 percent at 4,397.86.
The early strength on Wall Street partly reflected recent upward momentum, which has helped lift stocks to new record highs despite concerns about the spread of the delta variant of the coronavirus.
Traders remain optimistic about the outlook for the economy amid indications the Federal Reserve is not in a hurry to begin scaling back stimulus.
Positive sentiment may also have been generated after a bipartisan group of Senators unveiled a nearly $1 trillion infrastructure package.
Senate Majority Leader Chuck Schumer, D-N.Y., said he believes the Senate will vote to approve the massive bill in a matter of days.
However, buying interest has waned over the course of the session after a report from the Institute for Supply Management showed an unexpected slowdown in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its manufacturing PMI dipped to 59.5 in July from 60.6 in June. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to inch up to 60.9.
A separate report from the Commerce Department showed construction spending crept up by less than expected in the month of June.
Later this week, trading may be impacted by reaction to the Labor Department's closely watched report on the employment situation in the month of July.
Economists currently expect employment to spike by about 900,000 jobs in July after surging by 850,000 jobs in June. The unemployment rate is expected to dip to 5.7 percent from 5.9 percent.
Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.
Utilities stocks are seeing significant strength, however, with the Dow Jones Utility Average climbing by 1.1 percent.
Strength also remains visible among semiconductor stocks, although the Philadelphia Semiconductor Index has pulled back well off the record intraday high set earlier in the session.
On the other hand, oil service and gold stocks have moved to the downside on the day, with oil service stocks pulling back sharply after showing a strong move to the upside in early trading.
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Monday. Japan's Nikkei 225 Index spiked by 1.8 percent, while China's Shanghai Composite Index soared by 2 percent.
The major European markets also moved to the upside on the day. While the French CAC 40 Index jumped by 1 percent, the U.K.'s FTSE 100 Index advanced by 0.7 percent and the German DAX Index inched up by 0.2 percent.
In the bond market, treasuries have moved notably higher following the weaker than expected manufacturing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.8 basis points at 1.161 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.