Stocks Continue To Experience Choppy Trading - U.S. Commentary

(RTTNews) - On the heels of the rebound seen over the course of the trading session last Friday, stocks are turning in a lackluster performance during trading on Monday. The Dow and the Nasdaq have moved in opposite directions, while the S&P 500 has spent the day lingering near the unchanged line.

Currently, the major averages continue to turn in a mixed performance. While the Dow is down 45.78 points or 0.3 percent at 17,694.85, the Nasdaq is up 16.28 points or 0.3 percent at 4,752.44 and the S&P 500 is up 1.23 points or 0.1 percent at 2,058.37.

The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves amid the lack of major U.S. economic data scheduled to be released on the day.

The economic calendar remains relatively quiet throughout the week, although traders are likely to keep a close eye on reports on retail sales and producer prices due to be released on Friday.

Last Friday, the Labor Department released a report showing much weaker than expected job growth in the month of April.

The report said non-farm payroll employment rose by 160,000 jobs in April compared to economist estimates for a jump of about 200,000 jobs.

Meanwhile, the Labor Department also said the annual rate of growth in average hourly employee earnings accelerated to 2.5 percent in April from 2.3 percent in March.

Traders are also digesting disappointing Chinese trade data, which is weighing on commodities prices amid concerns about demand.

A report showed that Chinese exports fell 1.8 percent year-over-year in April compared to expectations for a flat reading. Chinese imports also plunged by 10.9 percent, bigger than the expected 4 percent drop.

Among individual stocks, shares of Krispy Kreme (KKD) are moving sharply higher after the doughnut maker agreed to be taken private by JAB Beech for $21 per share in cash or a total value of approximately $1.35 billion.

Biopharmaceutical company Horizon Pharma (HZNP) is also seeing significant strength after reporting better than expected first quarter results. The company also announced plans to repurchase up to 5 million shares.

At the other end of the spectrum, shares of Lending Club (LC) have come under pressure after the peer-to-peer lending company announced the resignation of Renaud Laplanche as Chairman and CEO.

Sector News

Despite the lackluster performance being turned in by the broader markets, steel stocks are seeing substantial weakness on the day. The NYSE Arca Steel Index has plummeted by 7.4 percent to its lowest intraday level in a month.

The sell-off by steel stocks comes as the disappointing Chinese trade data has raised concerns about the outlook for global demand.

Gold stocks have also moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 6.3 percent. The weakness in the sector comes as gold for June delivery has tumbled $28.10 to $1,265.90 an ounce.

Similarly, a significant pullback by the price of crude oil is contributing to considerable weakness among energy stocks. Crude for June is sliding $1.05 to $43.61 a barrel after rising as high as $45.94 a barrel earlier in the day.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index has plunged by 4.6 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil & Gas Index are both down by 2.3 percent.

On the other hand, biotechnology stocks have shown a strong move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 2.1 percent. The index is rebounding after ending the previous session at its lowest closing level in over a month.

Pharmaceutical, health care, and retail stocks are also seeing some strength in mid-day trading, offsetting the weakness among resource stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index advanced by 0.7 percent, while China's Shanghai Composite Index plunged by 2.8 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index climbed by 0.5 percent and the German DAX surged up by 1.1 percent.

In the bond market, treasuries have moved moderately higher following last Friday's pullback. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 1.758 percent.