Stocks Close Mostly Higher Amid Light Trading Activity - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Monday, adding to the gains posted last week. While buying interest was somewhat subdued, the Dow and the S&P 500 still reached new record closing highs.

The major averages all closed in positive territory, although the Dow inched up only 7.84 points or less than a tenth of a percent to 17,817.90. The tech-heavy Nasdaq advanced 41.92 points or 0.9 percent to 4,754.89 and the S&P 500 climbed 5.91 points or 0.3 percent to 2,069.41.

The strength on Wall Street partly reflected the recent upward momentum for the markets, which has lifted the major averages well off their mid-October lows.

Optimism about the global economic outlook also generated some buying interest following the Chinese central bank's surprise interest rate cut and European Central Bank President Mario Draghi's comments about further stimulus.

However, Peter Boockvar, managing director at the Lindsey Group, cautioned that the timing of more quantitative easing by the ECB is not completely clear.

Boockvar pointed to comments by ECB Governing Council member Ewald Nowotny noting that monetary policy has long lags and suggesting that policymakers should have a calm hand.

"Is this is way of saying Draghi doesn't have a calm hand and is panicking?" Boockvar said. "Nowotny also said headline inflation is being weighed down by energy prices and maybe they should more focus on the core rate as it's not as far away from their target."

Trading activity on Wall Street remained relatively light, with a lack of major U.S. economic data keeping some traders on the sidelines.

While trading will be interrupted by the Thanksgiving Day holiday on Thursday, traders will be presented with a slew of economic data in the next two days, particularly on Wednesday.

Reports on third quarter GDP, durable goods orders, personal income and spending, and new home sales are likely to be in focus.

Sector News

Biotechnology stocks showed a strong move to the upside on the day, contributing to the advance by the Nasdaq. The NYSE Arca Biotechnology Index jumped by 1.8 percent to a new record closing high.

Incyte (INCY), Illumina (ILMN), and Cepheid (CPHD) turned in some of the biotech sector's best performances.

Significant strength was also visible among airline stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Airline Index. Hawaiian Airlines parent Hawaiian Holdings (HA) and SkyWest (SKYW) posted standout gains.

Computer hardware, networking and semiconductor stocks also saw considerable strength, while gold and natural gas stocks moved lower along with their associated commodities.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index jumped 2 percent and 1.9 percent, respectively. The Japanese markets were closed for a holiday.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index dropped by 0.3 percent, the French CAC 40 Index and the German DAX Index both rose by 0.5 percent.

In the bond market, treasuries ended the day slightly higher following a solid two-year note auction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point at 2.31 percent.

Looking Ahead

Following today's lack of major U.S. economic data, trading on Tuesday could be impacted by the Commerce Department's revised report on third quarter GDP as well as reports on home prices and consumer confidence.