Stocks See Modest Strength But Dow Closes Roughly Flat - U.S. Commentary

(RTTNews) - Stocks moved modestly higher over the course of the trading session on Monday after initially showing a lack of direction. While the Dow ended the day roughly flat, the broader Nasdaq and S&P 500 closed in positive territory.

The Dow edged down 5.82 points or less than a tenth of a percent to 21,408.52, but the Nasdaq climbed 23.31 points or 0.4 percent to 6,176.39 and the S&P 500 inched up 2.25 points or 0.1 percent to 2,427.43.

Traders seemed somewhat reluctant to make more significant moves ahead of Federal Reserve Chair Janet Yellen's semiannual testimony before Congress.

Yellen is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

The comments from the Fed Chief could have a significant impact on the outlook for interest rates ahead of the central bank's monetary policy meeting later this month.

Remarks by several other Fed officials may also attract attention this week along with reports on retail sales, industrial production and producer and consumer prices.

The roughly flat close by the Dow came as a steep drop by shares of Wal-Mart (WMT) offset strong gains by Nike (NKE) and Visa (V).

Among individual stocks, shares of ClubCorp Holdings (MYCC) moved sharply higher after the private golf club operator agreed to be acquired by Apollo Global (APO) for $1.1 billion in cash.

Phone company Hawaiian Telcom (HCOM) also posted a substantial gain after agreeing to be acquired by Cincinnati Bell (CBB) for $30.75 per share or about $650 million.

On the other hand, shares of Abercrombie & Fitch (ANF) showed a steep drop on news the apparel retailer announced it has terminated discussions regarding a potential sale.

Sector News

Gold stocks showed a significant move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.8 percent. The index bounced off its lowest closing level in six months.

The rebound by gold stocks came amid an increase by the price of the precious metal, with gold for August delivery rising $3.50 to $1,213.20 an ounce.

Considerable strength was also visible among steel stocks, as reflected by the 1.7 percent advance by the NYSE Arca Steel Index. Cliffs Natural Resources (CLF) and Gerdau (GGB) posted standout gains.

Energy stocks also turned in a strong performance, moving higher along with the price of crude oil. Crude for August delivery inched up $0.17 to $44.40 a barrel.

Semiconductor and internet stocks also saw some strength on the day, while notable weakness was visible among biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index closed up by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries regained some ground after trending lower over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.371 percent.

Looking Ahead

Trading activity on Tuesday may be somewhat subdued as traders continue to look ahead to Yellen's congressional testimony.