Stocks Close Mixed For Fifth Consecutive Session - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction over the course of the trading session on Monday, extending the lackluster performance seen over the past several sessions. The major averages spent the day bouncing back and forth across the unchanged line.

For the fifth consecutive session, the major averages finished the day mixed. While the Nasdaq rose 22.06 points or 0.4 percent to 5,184.20, the Dow slipped 27.73 points or 0.2 percent to 18,404.51 and the S&P 500 edged down 2.76 points or 0.1 percent to 2,170.84.

The choppy trading on Wall Street came as traders remained reluctant to make any significant moves ahead of some key events later this week.

The Bank of England's monetary policy decision on Thursday is likely to be in focus along with the monthly U.S. jobs report due on Friday.

On the U.S. economic front, the Institute for Supply Management released a report this morning showing a modest slowdown in the pace of growth in the manufacturing sector in the month of July.

The ISM said its purchasing managers index dipped to 52.6 in July from 53.2 in June, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to come in unchanged.

The drop by the manufacturing index came after it hit its highest level since reaching 53.3 in February of 2015 in the previous month.

A separate report from the Commerce Department showed an unexpected decline in construction spending in the month of June.

The report said construction fell by 0.6 percent to an annual rate of $1.134 trillion in June. The decrease came as a surprise to economists, who had expected spending to climb by 0.6 percent.

Sector News

Most of the major sectors ended the day showing only modest moves, although considerable weakness was visible among energy stocks.

The weakness in the energy sector came as the price of crude oil for September delivery tumbled $1.54 to $40.06 a barrel, its lowest closing level in over three months.

Reflecting the weakness in the sector, the NYSE Arca Natural Gas Index plunged by 4.2 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index slumped by 3.2 percent and 3.1 percent, respectively.

On the other hand, biotechnology stocks showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 2.4 percent. With the gain, the index reached a nearly seven-month closing high.

Ionis Pharmaceuticals (IONS) led the biotech sector higher after a study of a drug it is developing with Biogen (BIIB) to treat spinal muscular atrophy met its primary endpoint.

Notable strength was also visible among gold stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Gold Bugs Index. The gain lifted the index to its best closing level in over three years.

The strength among gold stocks came amid a modest increase by the price of the precious metal, with gold for December delivery rising $2.10 to $1,359.60 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index fell by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries gave back some ground after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.8 basis points to 1.496 percent.

Looking Ahead

General Growth Properties (GGP), Tenet Healthcare (THC), and Williams Companies (WMB) are among the companies releasing their quarterly results after the close of today's trading.

Additionally, Aetna (AET), Archer Daniels Midland (ADM), CVS Health (CVS), Honda (HMC), and Pfizer (PFE) are due to report their results before the start of trading on Tuesday.

Trading on Tuesday could also be impacted by reaction to a report on U.S. personal income and spending in the month of June.