Stocks Experiencing Choppy Trading Ahead Of Fed Meeting - U.S. Commentary

(RTTNews) - After seeing initial weakness, stocks have shown a lack of direction over the course of the trading session on Monday. The major averages have recovered from their early lows and have subsequently been bouncing back and forth across the unchanged.

Currently, the major averages are posting modest losses on the day. The Dow is down 11.09 points or 0.1 percent at 17,202.22, the Nasdaq is down 1.80 points or less than 0.1 percent at 4,746.66 and the S&P 500 is down 5.59 points or 0.3 percent at 2,016.60.

The choppy trading on Wall Street comes as traders are looking ahead to the Federal Reserve's monetary policy decision scheduled to be announced Wednesday afternoon.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the wording of the accompanying statement.

A slew of economic data is also scheduled to be released in the coming days, including reports on retail sales, industrial production, and producer and consumer price inflation.

Profit taking contributed to the initial pullback by stocks, with traders cashing in on the gains seen over the past few weeks.

The rally seen last Friday helped the major averages to close higher for the fourth straight week, ending the day at their best closing levels in two months.

A steep drop by the price of crude oil is also weighing on the markets, with crude for April delivery tumbling $1.63 to $36.87 a barrel.

The price of crude oil jumped $2.58 or 7.2 percent to $38.50 a barrel in the previous week, reaching its highest closing level in three months.

Sector News

Reflecting the sharp pullback by the price of crude oil, energy stocks are turning in some of the market's worst performances on the day.

The Philadelphia Oil Service Index has slumped by 3.2 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil & Gas Index are down by 2.8 percent and 2.6 percent, respectively.

Notable weakness is also visible among computer hardware stocks, but most of the other major sectors are showing only modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw considerable strength during trading on Monday. Japan's Nikkei 225 Index shot up by 1.7 percent, while Hong Kong's Hang Seng Index jumped by 1.2 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has spiked by 1.5 percent, the U.K.'s FTSE 100 Index is up by 0.5 percent and the French CAC 40 Index is up by 0.2 percent.

In the bond market, treasures are regaining some ground after trending lower in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.947 percent.