U.S. Stocks Give Back Ground After Early Advance, Close Little Changed
After failing to sustain an early move to the upside, stocks gave back ground over the course of the trading session on Monday. The major averages pulled back off their highs of the session and spent the remainder of the day lingering near the unchanged line.
The major averages eventually ended the session narrowly mixed. While the Dow inched up 29.07 points or 0.1 percent to 32,832.54, the Nasdaq slipped 13.10 points or 0.1 percent to 12,644.46 and the S&P 500 edged down 5.13 points or 0.1 percent to 4,140.06.
The early strength on Wall Street extended a recent upward trend on Wall Street, with the major averages continuing to recover from their June lows. The Nasdaq and S&P 500 reached three-month intraday highs before pulling back.
Easing concerns about a potential recession may have contributed to the continued upward move following last week’s much stronger than expected jobs data.
Buying interest waned over the course of the session, however, as the strong jobs data has increased the likelihood of another 75 basis point interest rate hike by the Federal Reserve next month.
Traders may also have been reluctant to make significant bets ahead of the release of closely watched U.S. inflation data in the coming days.
Economists have suggested that the inflation data could have an even greater impact on Fed officials’ thinking than the jobs data.
The pullback on Wall Street also came following a warning from graphics chip maker Nvidia (NVDA), which has tumbled by 6.3 percent following the news.
Nvidia reported preliminary second quarter revenue of $6.70 billion versus its outlook for $8.10 billion, with weaker gaming revenue blamed for the shortfall.
Sector News
Despite the pullback by the broader markets, gold stocks held on to strong gains amid an increase by the price of the precious metal.
With gold for December delivery climbing $14 to $1,805.20 an ounce, the NYSE Arca Gold Bugs Index jumped by 2.6 percent to its best closing level in almost a month.
Airline stocks also turned in a strong performance on the day, driving the NYSE Arca Airline Index up by 2.2 percent to a two-month closing high.
Housing and tobacco stocks also saw notable strength, while the warning from Nvidia weighed on semiconductor stocks, dragging the Philadelphia Semiconductor Index down by 1.6 percent.
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 rose by 0.3 percent, while Hong Kong’s Hang Seng Index slid by 0.8 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index climbed by 0.6 percent, the French CAC 40 Index and the German DAX Index both advanced by 0.8 percent.
In the bond market, treasuries regained ground after moving sharply lower last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.5 basis points to 2.765 percent.
Looking Ahead
A report on labor productivity and costs in the second quarter may attract some attention on Tuesday, although trading activity may remain somewhat subdued ahead of the release of consumer price inflation data on Wednesday.
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