Stocks Finish Lackluster Trading Session Roughly Flat - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout the trading day on Monday before ending the day roughly flat. Traders seemed reluctant to make any significant moves following the strong upward move seen over the past few weeks.

The major averages ended the day mixed, with the S&P 500 posting a slim gain. While the S&P 500 crept up 2.34 points or 0.1 percent to 1,762.11, the Dow edged down 1.35 points or less than a tenth of a percent to 15,568.93 and the Nasdaq dipped 3.23 points or 0.1 percent to 3,940.13.

The choppy trading on Wall Street came as traders took a break following the recent upward trend, which has lifted the S&P 500 to record highs.

Traders were also likely looking ahead to the two-day meeting of the Federal Reserve's monetary policy committee due to begin on Tuesday.

Analysts widely expect the recent government shutdown to lead the Fed to delay its plans to begin tapering its asset purchase program for the foreseeable future.

"We expect the FOMC statement released on Wednesday to strike a more downbeat tone on the current economic situation than in September," Danske Bank said in a research note.

The firm added, "Furthermore, the forward-looking part of the statement is likely to highlight increased uncertainty over the economic outlook for next year, although the easing in financial conditions since the September meeting is likely to be acknowledged."

Danske Bank predicted that the start of tapering will be delayed until early next year, specifically pointing to the March meeting.

On the economic front, the National Association of Realtors released a report showing that pending home sales in the U.S. unexpectedly saw a substantial decrease in September.

NAR said its pending home sales index tumbled 5.6 percent to 101.6 in September after falling 1.6 percent to a downwardly revised 107.6 in August. Economists had expected pending home sales to come in unchanged.

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.

With the unexpected decrease, the pending home sales index fell for the fourth consecutive month, dropping to its lowest level since December of 2012.

A separate report from the Federal Reserve showed a bigger than expected increase in industrial production in September, although the increase was largely due to a sharp rebound in utilities output.

Among individual stocks, shares of Merck (MRK) fell by 2.6 percent after the drug giant reported better than expected third quarter earnings but on weaker than expected revenues. Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the roughly flat close by the broader markets.

Gold stocks saw considerable strength, however, with the NYSE Arca Gold Bugs Index advancing by 1.2 percent. With the gain, the index reached its best closing level in over a month.

Electronic storage, semiconductor, and oil service stocks also saw some strength on the day, while weakness was visible among internet, commercial real estate, and chemical stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index fell by 0.5 percent and the German DAX Index dipped by 0.1 percent.

In the bond market, treasuries showed a lack of direction for much of the session before ending the day slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by less than a basis point to 2.512 percent.

Looking Ahead

A slew of economic data is scheduled to be released on Tuesday, including reports on retail sales, producer prices, home prices, and consumer confidence.

Nonetheless, trading activity may remain somewhat subdued as traders look ahead to the conclusion of the Fed meeting.

On the earnings front, Apple (AAPL) is among the companies releasing their quarterly results after the close of today's trading, while Pfizer (PFE), Goodyear (GT), and JetBlue (JBLU) are due to report their results before the start of trading on Tuesday.