Disappointing Chinese Trade Data Weighing On Wall Street - U.S. Commentary

(RTTNews) - After moving modestly lower in early trading on Monday, stocks have seen continued weakness over the course of the trading session. The pullback on the day is partly offsetting the strong upward move that was seen last week.

The major averages have climbed off their worst levels of the day but currently remain in the red. The Dow is down 84.14 points or 0.5 percent at 16,368.58, the Nasdaq is down 13.14 points or 0.3 percent at 4,323.08 and the S&P 500 is down 6.72 points or 0.4 percent at 1,871.32.

The weakness on Wall Street comes following the release of disappointing Chinese trade data, with a report from the Chinese General Administration of Customs showing that China swung to a trade deficit in February.

With Chinese exports falling 18.1 percent year-over-year in February compared to a 10.1 percent increase in imports, the report showed a trade deficit of nearly $23 billion compared to a surplus of $31.9 billion in the same month last year.

Combining the data for January and February to smooth out the volatility caused by the Lunar New Year holidays showed that exports fell 1.6 percent but imports rose 10 percent, resulting in a 79.1 percent drop in the trade surplus to $8.89 billion.

The data contributed to a significant sell-off by Chinese stocks, with the Shanghai Composite Index plunging by 2.9 percent.

Nonetheless, trading activity on Wall Street has remained somewhat subdued amid a lack of major U.S. economic data following the slew of data released last week.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "In the U.S., the important economic data of the week doesn't come until Thursday's retail sales and Friday's PPI, and with commodity prices at the highest level since October '12, inflation numbers should now be a focus."

A notable drop by shares of Boeing (BA) is weighing on the day, with the aerospace giant falling by 2.5 percent. Late Friday, Boeing announced that cracks had been discovered in the wings of 787 Dreamliner jets still in production.

Sector News

Amid concern about the outlook for Chinese demand, steel stocks are seeing significant weakness in mid-day trading. The NYSE Arca Steel Index has tumbled by 2.4 percent to its lowest intraday level in six months.

Housing stocks have also come under pressure on the day, dragging the Philadelphia Housing Sector Index down by 1.5 percent. KB Home (KBH) and Meritage Homes (MTH) are turning in two of the sector's worst performance.

Oil service, defense and telecom stocks are also seeing notable weakness, while most of the other major sectors are showing more modest moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness during trading on Monday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index tumbled by 1.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 1.1 percent, the .K.'s FTSE 100 Index is down by 0.4 percent and the French CAC 40 Index is down by 0.1 percent.

In the bond market, treasuries are showing a lack of direction amid a quiet day on the U.S. economic front. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.786 percent.