Stocks Close Modestly Higher, Dow And S&P 500 Set New Highs - U.S. Commentary

(RTTNews) - While buying interest was somewhat subdued, stocks moved modestly higher over the course of the trading day on Monday. The gains lifted the Dow and the S&P 500 to new record closing highs, while the Nasdaq reached its best closing level since 2000.

The major averages moved roughly sideways going into the close, hovering in positive territory. The Dow edged up 39.81 points or 0.2 percent to 17,613.74, the Nasdaq climbed 19.08 points or 0.4 percent to 4,651.62 and the S&P 500 rose 6.34 points or 0.3 percent to 2,038.26.

The modest strength on Wall Street was partly in reaction to data out of China, with a report from Chinese Customs showing stronger than expected export growth in the month of October.

The report said Chinese exports were up by 11.6 percent year-over-year in October, reflecting a slowdown from the 15.3 percent growth seen in September but above economist estimates for a 10.5 percent increase.

However, Peter Boockvar, managing director at the Lindsey Group, noted that a sharp jump in exports to Hong Kong raises questions about invoice inflated figures.

A separate report from the Chinese National Bureau of Statistics showed that annual consumer price inflation in China remained unchanged at a five-year low of 1.6 percent in October.

Nonetheless, trading activity on Wall Street remained somewhat subdued amid a lack of major U.S. economic data on the day.

The economic calendar remains relatively light throughout the week, although traders are likely to keep an eye on reports on retail sales, consumer sentiment and weekly jobless claims.

The Veterans Day holiday on Tuesday also kept some traders away from their desks, as the bond markets and most banks will be closed on the day even though the stock markets will be open for trading.

Among individual stocks, shares of Dean Foods (DF) moved sharply higher after the milk company reported better than expected third quarter results.

Homebuilder Toll Brothers (TOL) also showed a strong move to the upside after forecasting fiscal fourth quarter revenues above analyst estimates.

On the other hand, shares of Dendreon (DNDN) saw substantial weakness after the biotech company filed for Chapter 11 bankruptcy protection.

Sector News

While many of the major sectors ended the day showing only modest moves, significant strength was visible among transportation stocks. The Dow Jones Transportation Average climbed 1.3 percent to a new record closing high.

Railroad stocks turned in some of the best performances within the railroad sector, driving the Dow Jones Railroads Index up by 2.2 percent. Guangshen Railway (GSH) and FreightCar America (RAIL) posted standout gains.

Airline and trucking stocks also saw considerable strength as a notable decline by the price of oil generated optimism about lower fuel costs. Crude for December tumbled $1.25 to $77.40 a barrel.

Outside of the transportation sector, strength was also visible among biotechnology, brokerage, and healthcare stocks.

Meanwhile, gold stocks saw substantial weakness on the day, dragging the NYSE Arca Gold Bugs Index down by 6.1 percent. The weakness in the sector came as gold for December delivery fell $10 to $1,159.80 an ounce.

Steel, networking, and energy stocks also moved to the downside, partly offsetting the strength in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region started the week with another mixed performance on Monday. Japan's Nikkei 225 Index fell by 0.6 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index climbed by 0.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index both rose by 0.7 percent.

In the bond market, treasuries gave back some ground after moving sharply higher last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.7 basis points to 2.359 percent.

Looking Ahead

While the stock markets will be open on Tuesday, trading activity is likely to remain relatively subdued due to the Veterans Day holiday.