U.S. Stocks Turning In Mixed Performance Following Last Friday’s Rally

Following the rally seen in the previous session, stocks are turning in a mixed performance in morning trading on Monday. While the Dow has seen further upside, reaching its best intraday level in over a month, the tech-heavy Nasdaq has given back ground.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is down 79.01 points or 0.7 percent at 10,780.71, but the Dow is up 199.59 points or 0.6 percent at 31,282.15 and the S&P 500 is up 7.65 points or 0.2 percent at 3,760.40.

The pullback by the Nasdaq comes as news Chinese President Xi Jinping has secured a third term has led to worries about a continued crackdown on the country’s tech sector.

The mixed performance on Wall Street also comes amid uncertainty about the outlook for interest rates ahead of next week’s Federal Reserve meeting.

The Fed is widely expected to raise interest rates by another 75 basis points next week, but traders are hopeful the central bank will indicate plans to slow the pace of rates hikes beginning in December.

The optimism partly stems from a Wall Street Journal report suggesting some Fed officials have expressed greater unease with the aggressive pace of rate hikes.

The volatility may also reflect below average volume, with a lack of major U.S. economic data keeping some traders on the sidelines.

A report on personal income and spending that includes a reading on inflation said to be preferred by the Fed is likely to be in focus in the coming days.

Traders are also likely to keep an eye on reports on consumer confidence, new home sales, and durable goods orders and third quarter GDP.

Earnings news may also drive trading this week, with Coca-Cola (KO), General Electric (GE), Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT), McDonald’s (MCD), Apple (AAPL), Intel (INTC) and Exxon Mobil (XOM) among a slew of big-name companies due to report their quarterly results.

Transportation stocks are turning in a strong performance in morning trading, driving the Dow Jones Transportation Average up by 2.1 percent.

Healthcare and pharmaceutical stocks are also seeing considerable strength, with the Dow Jones U.S. Health Care Index and the NYSE Arca Pharmaceutical Index both climbing by 1.5 percent.

Significant strength is also visible among banking stocks, as reflected by the 1.4 gain being posted by the KBW Bank Index.

On the other hand, gold stocks have shown a substantial move to the downside, dragging the NYSE Arca Gold Bugs Index down by 2.2 percent. The sell-off comes amid a modest decrease by the price of gold.

Steel stocks have also moved notably lower amid concerns about the outlook for global demand, resulting in a 1.8 percent drop by the NYSE Arca Steel Index.

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 China’s Shanghai Composite Index tumbled by 2.0 percent and Hong Kong’s Hang Seng Index plummeted by 6.4 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.5 percent, the German DAX Index is up by 1.1 percent and the French CAC 40 Index is up by 1.6 percent.

In the bond market, treasuries have moved lower over the course of the morning after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.3 basis points at 4.266 percent.

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