Stocks Close Modestly Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - After moving notably higher in early trading on Monday, stocks gave back ground over the course of the session but managed to remain mostly positive. The gains on the day extended the rally that was seen in the previous session.

The major averages ended the day modestly higher but well off their best levels. The Dow rose 46.34 points or 0.3 percent to 18,070.40, the Nasdaq edged up 11.54 points or 0.2 percent to 5,016.93 and the S&P 500 climbed 6.20 points or 0.3 percent to 2,114.49.

The early strength on Wall Street partly reflected a positive reaction to the latest batch of earnings news, with shares of Tyson Foods (TSN) moving notably higher after the meat producer reported first quarter earnings that came in above analyst estimates.

Cable giant Comcast (CMCSA) also ended the day higher after reporting better than expected first quarter results. The company also added $2.5 billion to its existing stock repurchase program.

On the other hand, shares of Sysco (SYY) came under pressure after the food distributor reported second quarter results that missed expectations.

Traders were also presented with a report from the Commerce Department showing a notable increase in factory orders in the month of March.

The Commerce Department said factory orders surged up by 2.1 percent in March following a revised 0.1 percent decrease in February. Economists had expected orders to increase by about 2.0 percent.

However, the increase was largely due to a rebound in orders for transportation equipment, which soared by 13.5 percent in March after dropping by 1.4 percent in the previous month.

Excluding the volatile transportation sector, the Commerce Department said factory orders were unchanged in March compared to a 0.1 percent increase in February.

Nonetheless, overall trading activity was somewhat subdued as traders looked ahead to the release of more closely watched economic data later in the week.

The monthly jobs report due on Friday is likely to be in the spotlight, although reports on service sector activity, international trade, and labor productivity may also attract attention along with a speech by Federal Reserve Chair Janet Yellen.

Sector News

Despite the advance by the broader markets, most of the major sectors finished the session showing only modest moves.

Banking stocks saw considerable strength, however, with the Dow Jones Banks Index climbing by 1.4 percent. With the gain, the index reached its best closing level in four months.

First Niagara (FNFG), M&T Bank (MTB), and Bank of America (BAC) turned in some of the banking sector's best performances.

Networking, trucking, and brokerage stocks also saw some strength on the day, although buying interest was somewhat subdued.

On the other hand, airline stocks came under pressure over the course of the session, dragging the NYSE Arca Airline Index down by 1.2 percent.

Republic Airways (RJET) helped to lead the airline sector lower, tumbling by 6.6 percent after providing disappointing first quarter guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although the Japanese markets were closed on the day. China's Shanghai Composite Index advanced by 0.9 percent, while Australia's All Ordinaries Index rose by 0.3 percent.

The major European markets also moved to the upside on the day. While the U.K. markets were closed, the French CAC 40 Index advanced by 0.7 percent and the German DAX Index surged up by 1.4 percent.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 1.8 basis points to 2.135 percent.

Looking Ahead

While trading activity may remain somewhat subdued ahead of Friday's job reports, trading on Tuesday could be impacted by reaction to reports on international trade and service sector activity.

Media giant Disney (DIS) may also be in focus after releasing its fiscal second quarter results before the start of trading.