Stocks Close Mostly Lower Following Late-Day Pullback - U.S. Commentary

(RTTNews) - After turning in a lackluster performance for much of the session, stocks came under pressure in the latter part of the trading day on Monday and closed mostly lower. Profit taking contributed to the pullback by the markets along with a negative reaction to comments from billionaire investor Carl Icahn.

The major averages showed a notable move to the downside in late-day trading but ended the day mixed, as the Dow managed to post a modest gain.

While the Dow edged up 14.32 points or 0.1 percent to 15,976.02, the Nasdaq tumbled 36.90 points or 0.9 percent to 3,939.07 and the S&P 500 fell 6.65 points or 0.4 percent to 1,791.53.

The pullback seen late in the day was partly attributed to troubling remarks Icahn made at the Reuters Global Investment Outlook Summit.

Icahn said he is "very cautious" on stocks and warned that the markets could see a "big drop" because earnings at many companies are fueled more by low interest rates than strong management.

Traders also took the opportunity to cash in on some of the recent strength in the markets, which has lifted the Dow and the S&P 500 to record highs.

Before the late-day pullback, the Dow and the S&P 500 managed to climb above key psychological levels at 16,000 and 1,800, respectively.

On the economic front, the National Association of Home Builders released a report showing that homebuilder confidence held steady in the month of November.

The report said the NAHB/Wells Fargo Housing Market Index came in at 54 in November, unchanged from the downwardly revised reading for October.

Economists had expected the index to come in unchanged compared to the 55 originally reported for the previous month.

Meanwhile, a strong gain by Boeing (BA) contributed to the positive close by the Dow, with the aerospace giant rising by 1.7 percent after booking $100 billion in orders at the opening of the Dubai Airshow.

Meat processor Tyson Foods (TSN) also moved to the upside on the day after reporting fourth quarter earnings that came in slightly above analyst estimates.

On the other hand, shares of Microsoft (MSFT) came under pressure after Bank of America/Merrill Lynch downgraded its rating on the software giant to Underperform from Neutral.

Sector News

Gold stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Gold Bugs Index down by 2 percent. With the loss, the index fell to its lowest closing level in a month.

The weakness among gold stocks came amid a notable decrease by the price of the precious metal, with gold for December delivery falling $15.10 to $1,272.30 an ounce.

Considerable weakness was also visible among oil service stocks, which moved lower along with the price of the crude oil. The Philadelphia Oil Service Index fell by 1.9 percent after ending last Friday's trading at a two-year closing high.

Biotechnology, networking, and computer hardware stocks also came under pressure, contributing to the notable downward move by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index surged up by 2.7 percent and 2.9 percent, respectively amid news of comprehensive economic reforms in China.

The major European markets also moved to the upside. While the U.K.'s FTSE 100 Index rose by 0.5 percent, the German DAX Index and the French CAC 40 Index advanced by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries moved moderately higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.678 percent.

Looking Ahead

Trading activity on Tuesday may be somewhat subdued amid a lack of major U.S. economic data and ahead of a speech from Fed Chairman Ben Bernanke after the close of trading.

On the earnings front, Home Depot (HD), Best Buy (BBY), Medtronic (MDT), and Campbell Soup (CPB) are among the companies due to report their quarterly results before the start of trading on Tuesday.