Stocks Close Modestly Higher But Off Best Levels - U.S. Commentary

(RTTNews) - After moving to the upside early in the session, stocks fluctuated over the course of the trading day on Monday but maintained a positive bias. The upward move came following the mixed performance seen last week.

The major averages finished the day in positive territory but well off their best levels. The Dow rose 39.65 points or 0.2 percent to 19,883.06, the Nasdaq climbed 20.28 points or 0.4 percent to 5,457.44 and the S&P 500 edged up 4.46 points or 0.2 percent to 2,262.53.

The markets continued to benefit from the upward momentum seen since the elections, which drove the major averages to record highs last week.

Trading activity was relatively light, however, with some traders away from their desks ahead of the upcoming holidays.

A light day on the U.S. economic front also kept some traders on the sidelines, although several key reports are due in the coming days.

Traders are likely to keep a close eye on reports on durable goods orders, personal income and spending, and new and existing home sales.

A revised reading on third quarter GDP may also attract some attention along with reports on leading economic indicators and consumer sentiment.

Traders also kept an eye on Federal Reserve Janet Yellen's speech at the University of Baltimore's commencement, where she said the job market has improved and wages are on the rise.

"After years or a slow economic recovery, you are entering the strongest job market in nearly a decade," Yellen told the graduating students.

Among individual stocks, Allied World Assurance (AWH) moved notably higher after agreeing to be acquired by Canada's Fairfax Financial in a $4.9 billion cash and stock deal.

United Technologies (UTX) also posted a notable gain after Credit Suisse upgraded its rating on the industrial conglomerate's stock to Outperform from Neutral.

On the other hand, Mosaic (MOS) moved lower after agreeing to acquire Brazilian mining giant Vale's fertilizer business for $2.5 billion in cash and stock.

Sector News

Most of the major sectors ended the day showing only modest moves, although notable strength was visible among trucking stocks.

Reflecting the strength in the trucking sector, the Dow Jones Trucking Index advanced by 1.2 percent after closing lower in five out of the six previous sessions.

Significant strength was also visible among software stocks, as reflected by the 1.2 percent gain posted by the Dow Jones Software Index. Industry giant Microsoft (MSFT) posted a standout gain.

Telecom, commercial real estate and semiconductor stocks also saw some strength on the day, although buying interest was relatively subdued.

On the other hand, steel stocks came under pressure as the day progressed, dragging the NYSE Arca Steel Index down by 2 percent. The index fell to its lowest closing level in a month.

Biotechnology stocks also showed a notable move to the downside on the day, resulting in a 1.2 percent drop by the NYSE Arca Biotechnology Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index fell by 0.9 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index dipped by 0.2 percent, the U.K.'s FTSE 100 Index inched up by 0.1 percent and the German DAX Index crept up by 0.2 percent.

In the bond market, treasuries regained some ground after moving to the downside over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to 2.542 percent.

Looking Ahead

Amid another light day on the U.S. economic front, trading on Tuesday may be impacted by reaction to earnings news from companies such as BlackBerry (BBRY), CarMax (KMX), Carnival (CCL), Darden Restaurants (DRI), and General Mills (GIS).