Stocks Showing A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - With traders seemingly reluctant to make any significant moves, stocks are turning in a lackluster performance in early trading on Monday. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 28.90 points or 0.2 percent at 17,711.73, the Nasdaq is up 13.09 points or 0.3 percent at 4,749.25 and the S&P 500 is up 0.56 points or less than a tenth of a percent at 2,057.70.

The choppy trading on Wall Street comes 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.

Earnings news from companies such as Disney (DIS), Nokia (NOK), Macy's (M), Wendy's (WEN), and J.C. Penney (JCP) may also attract attention later this week.

Most of the major sectors are showing only modest moves on the day, contributing to the lack of direction being shown by the broader markets.

Steel stocks have shown a substantial move to the downside, however, with the NYSE Arca Steel Index plunging by 7.3 percent. With the drop, the index has fallen to its lowest intraday level in a month.

The sell-off by steel stocks comes as disappointing Chinese trade data has raised concerns about the outlook for global 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 4 percent drop expected by economists.

Considerable weakness has also emerged among gold stocks, as reflected by the 5.2 percent loss being posted by the NYSE Arca Gold Bugs Index.

The weakness in the gold sector comes amid a steep drop by the price of the precious metal, with gold for June delivery plunging $26.70 to $1,267.30 an ounce.

Energy stocks have also moved to the downside along with the price of crude oil, while strength is visible among pharmaceutical and biotechnology stocks.

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 early strength after reporting better than expected first quarter results. The company also announced plans to repurchase up to 5 million shares.

On the other hand, 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.

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 have also turned mixed on the day. While the U.K.'s FTSE 100 Index has edged down by 0.2 percent, the French CAC 40 Index is up by 0.6 percent and the German DAX Index is up by 1.1 percent.

In the bond market, treasuries have moved modestly 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 1.8 basis points at 1.761 percent.