Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading session on Monday, as traders seemed somewhat reluctant to make any significant moves. The major averages eventually ended the session on opposite sides of the unchanged line.

While the Dow edged down 34.72 points or 0.2 percent to 17,705.91, the broader Nasdaq and S&P 500 closed in positive territory. The Nasdaq rose 14.05 points or 0.3 percent to 4,750.21, and the S&P 500 inched up 1.55 points or 0.1 percent to 2,058.69.

The choppy trading on Wall Street came as some traders stayed on the sidelines 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.

Last Friday, the Labor Department released a report showing much weaker than expected job growth in the month of April.

The report said non-farm payroll employment rose by 160,000 jobs in April compared to economist estimates for a jump of about 200,000 jobs.

Meanwhile, the Labor Department also said the annual rate of growth in average hourly employee earnings accelerated to 2.5 percent in April from 2.3 percent in March.

Traders were also digesting disappointing Chinese trade data, which weighed on commodities prices amid concerns about 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 expected 4 percent drop.

Among individual stocks, shares of Krispy Kreme (KKD) moved 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.

Real estate investment trust HCP Inc. (HCP) also posted a strong gain after announcing plans to spin off its HCR ManorCare portfolio of skilled nursing and assisted living assets.

At the other end of the spectrum, shares of Lending Club (LC) came under pressure after the peer-to-peer lending company announced the resignation of Renaud Laplanche as Chairman and CEO.

Sector News

Biotechnology stocks showed a strong move to the upside over the course of the trading session, driving the NYSE Arca Biotechnology Index up by 2.8 percent. The index rebounded after ending the previous session at its lowest closing level in over a month.

Horizon Pharma (HZNP) posted a standout gain after the biopharmaceutical company reported better than expected first quarter results and announced plans to repurchase up to 5 million shares.

Considerable strength was also visible among pharmaceutical stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Pharmaceutical Index. The index was also bouncing off a one-month low.

Allergan (AGN) led the way higher after Teva (TEVA) reiterated it expects to complete its proposed $40.5 billion acquisition of Allergan's generics business by the end of June.

Healthcare, retail, and commercial real estate stocks also moved to the upside, contributing to the higher close by the Nasdaq and the S&P 500.

On the other hand, steel stocks moved sharply lower on the day, dragging the NYSE Arca Steel Index down by 7.8 percent. With the drop, the index fell to its lowest closing level in a month.

The sell-off by steel stocks came as the disappointing Chinese trade data raised concerns about the outlook for global demand.

Gold stocks also saw significant weakness, resulting in a 6.9 percent drop by the NYSE Arca Gold Bugs Index. The weakness in the sector comes as gold for June delivery tumbled $27.40 to $1,226.60 an ounce.

Similarly, a sharp pullback by the price of crude oil contributed to considerable weakness among energy stocks. Crude for June delivery slid $1.22 to $43.44 a barrel after rising as high as $45.94 a barrel.

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 advanced by 0.7 percent, while China's Shanghai Composite Index plunged by 2.8 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index climbed by 0.5 percent and the German DAX surged up by 1.1 percent.

In the bond market, treasuries 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, dipped 1.9 basis points to 1.760 percent.

Looking Ahead

Amid another relatively quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the latest batch of earnings news.

Credit Suisse (CS), Dean Foods (DF), Nokia (NOK), and World Wrestling Entertainment (WWE) are among the companies due to report their quarterly results before the start of trading on Tuesday.