Stocks Close Mostly Lower Amid Uncertainty Ahead Of Key Events - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Monday but maintained a negative bias for much of the session and ended mostly lower. The pullback on the day came after the major averages turned in a mixed performance last week.

The major averages finished the session firmly in the red. The Dow fell 78.57 points or 0.4 percent to 17,719.92, the Nasdaq slid 18.86 points or 0.4 percent to 5,108.67 and the S&P 500 dropped 9.70 points or 0.5 percent to 2,080.41.

The weakness on Wall Street partly reflected uncertainty ahead of several key events in the coming days, including the release of the Labor Department's monthly jobs report on Friday.

The jobs report, which is expected to show an increase of about 190,000 jobs in November, could have a significant impact on the outlook for interest rates.

Reports on manufacturing and service sector activity, private sector employment and international trade are also likely to attract some attention.

Federal Reserve Chair Janet Yellen is also scheduled to deliver two speeches this week, joining several other Fed officials that are due to give remarks.

Additionally, the European Central Bank is scheduled to hold a monetary policy meeting on Thursday, with many expecting the bank to provide further stimulus.

Traders were also reacting to the economic data released this morning, including a report from MNI Indicators showing an unexpected contraction in Chicago-area business activity in November.

The report said the Chicago Business Barometer tumbled to 48.7 in November from 56.2 in October, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the index to drop to 54.0.

MNI Indicators said the sharp drop by the business barometer is indicative of the see-saw pattern of demand seen in 2015, with output and orders shifting in and out of contraction.

The National Association of Realtors released a separate report showing a smaller than expected rebound in pending home sales in October.

NAR said its pending home sales index inched up by 0.2 percent to 107.7 in October from an upwardly revised 107.5 in September. Economists had expected the index to climb by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

Trucking stocks saw significant weakness on the day, resulting in a 1.8 percent drop by the Dow Jones Trucking Index. The loss by the index came after it ended the previous session at its best closing level in a month.

Werner Enterprises (WERN) and YRC Worldwide (YRCW) turned in two of the trucking sector's worst performances on the day.

Considerable weakness was also visible among airline stocks, as reflected by the 1.6 percent loss posted by the NYSE Arca Airline Index. Allegiant Travel (ALGT) led the sector lower after Raymond James downgraded the stock to Market Perform from Outperform.

Health care, biotechnology and retail stocks also saw notable weakness on the day, while gold stocks moved sharply higher amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index dropped by 0.7 percent, while Hong Kong's Hang Seng Index fell by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the French CAC 40 Index rose by 0.6 percent and the German DAX Index advanced by 0.8 percent.

In the bond market, treasuries closed slightly higher after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by nearly a basis point to 2.218 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to a report on national manufacturing activity as well as a report on construction spending.