Stocks showed a lack of direction over the course of the trading day on Monday, extending the lackluster performance seen during last Friday’s holiday-shortened session. The major averages bounced back and forth across the unchanged line before eventually closing modestly lower.
The Dow slipped 56.68 points or 0.2 percent to 35,333.47 and the S&P 500 dipped 8.91 points or 0.2 percent to 4,550.43, pulling back off their best closing levels in over three months, while the Nasdaq edged down 9.83 points or 0.1 percent to 14,241.02.
The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of some key economic data in the coming days.
The Commerce Department’s report on personal income and spending may be in the spotlight, as it includes readings on inflation said to be preferred by the Federal Reserve.
Economists currently expect the report to show the annual rate of consumer price growth slowed to 3.1 percent in October from 3.4 percent in September. Core price growth is expected to slow to 3.5 percent from 3.7 percent.
Traders are also likely to keep an eye on reports on consumer confidence, weekly jobless claims, pending home sales and manufacturing activity.
The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, may also attract attention along with remarks by Fed Chair Jerome Powell.
Traders will be looking for additional clues about the outlook for interest rates, with optimism the Fed is done raising rates contributing to recent strength on Wall Street.
The Commerce Department released a report this morning showing new home sales in U.S. pulled back sharply in the month of October after soaring in September.
The report said new home sales plunged by 5.6 percent to an annual rate of 679,000 in October after spiking by 8.6 percent to a downwardly revised rate of 719,000 in September.
Economists had expected new home sales to tumble by 4.5 percent to a rate of 725,000 from the 759,000 originally reported for the previous month.
Sector News
Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.
Transportation stocks saw considerable weakness, however, with the Dow Jones Transportation Average falling by 1.3 percent after ending last Friday’s trading at its best closing level in a month.
Notable weakness was also visible among networking stocks, as reflected by the 1.2 percent loss posted by the NYSE Arca Networking Index.
Biotechnology and pharmaceutical stocks also moved to the downside on the day, while gold stocks saw significant strength amid an increase by the price of the precious metal.
With gold for December delivery climbing $9.40 to $2,012.40 an ounce, the NYSE Arca Gold Bugs Index jumped by 1.9 percent to its best closing level in almost four months
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.5 percent, while China’s Shanghai Composite Index dipped by 0.3 percent.
The major European markets also moved to the downside on the day. The U.K.’s FTSE 100 Index, the French CAC 40 Index and the German DAX Index all fell by 0.4 percent.
In the bond market, treasuries climbed firmly into positive territory over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.3 basis points to a two-month closing low of 4.389 percent.
Looking Ahead
Trading on Tuesday may be impacted by reaction to reports on home prices and consumer confidence as well as remarks by several Fed officials.
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