After failing to sustain an early move to the upside, stocks showed a lack of direction over the course of the trading session on Monday. The major averages bounced back and forth across the unchanged line before ending the day roughly flat.
The major averages finished the day slightly lower, edging down by less than a tenth of a percent each. The Dow slipped 12.86 points to 36,087.45, the Nasdaq dipped 7.11 points to 15,853.85 and the S&P 500 edged down 0.05 points to 4,682.80.
The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets.
Upbeat Chinese economic data generated some buying interest, although concerns about inflation continued to weigh on investors’ minds after last week’s report showing consumer prices increased at their fastest annual rate in over thirty years in October.
The elevated pace of inflation has led to worries that the Federal Reserve might be forced to accelerate its plans to begin tightening monetary policy.
However, the Fed has repeatedly described the factors driving inflation as “transitory” and signaled that it will not be in a hurry to start raising interest rates.
In U.S. economic news, the New York Federal Reserve released a report showing New York manufacturing activity grew strongly in the month of November.
The New York Fed said its general business conditions index jumped to 30.9 in November from 19.8 in October, with a positive reading indicating growth. Economists had expected the index to rise to 21.6.
Meanwhile, the report said firms were less optimistic about the six-month outlook than they were last month, with the index for future business conditions tumbling to 36.9 in November from 52.0 in October.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Tobacco stocks showed a substantial move to the upside, however, with the NYSE Arca Tobacco Index surging up by 2.4 percent.
Significant strength was also visible among utilities stocks, as reflected by the 1.3 percent drop by the Dow Jones Utilities Average.
On the other hand, steel stocks saw considerable weakness on the day, resulting in a 1.7 percent slump by the NYSE Arca Steel Index.
Oil service stocks also showed a notable move to the downside, dragging the Philadelphia Oil Service Index down by 1.2 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although China’s Shanghai Composite Index bucked the uptrend and edged down by 0.2 percent. Japan’s Nikkei 225 Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the German DAX Index rose by 0.3 percent and the French CAC 40 Index climbed by 0.5 percent.
In the bond market, treasuries moved lower over the course of the session after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.1 basis points at 1.623 percent.
Trading on Tuesday may be impacted by reaction to some key U.S. economic data, including reports on retail sales and industrial production.
Retail giants Walmart (WMT) and Home Depot (HD) are also among the companies due to report their quarterly results before the start of trading on Tuesday.
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