Stocks Recover From Initial Drop To Close Mostly Higher - U.S. Commentary

(RTTNews) - After initially coming under pressure, stocks showed a significant turnaround over the course of the trading day on Monday before closing mostly higher. With the upward move, the Dow reached its highest closing level since last July.

The major averages finished the day just off their highs for the session. The Dow climbed 106.70 points or 0.6 percent to 18,004.16, the Nasdaq rose 21.80 points or 0.4 percent to 4,960.02 and the S&P 500 advanced 13.61 points or 0.7 percent to 2,094.34.

The early volatility on Wall Street came as traders kept a close eye on developments regarding the price of crude oil.

After falling as low as $37.61 a barrel, crude oil for May delivery showed a notable recovery attempt but still ended the day down by $0.58 at $39.78 a barrel.

With the decrease, the price of crude oil closed lower for the fourth consecutive session after ending last Tuesday's trading at its highest closing level since November.

The initial drop by the price of oil came after major oil producing nations failed to reach an agreement on a production freeze at a weekend meeting in Doha.

On the U.S. economic front, the National Association of Home Builders released a report showing that homebuilder confidence remained unchanged in April.

The report said the NAHB/Wells Fargo Housing Market Index came in at 58 in April, unchanged from March. The index had been expected to inch up to 59.

Among individual stocks, shares of Cvent (CVT) moved sharply higher on the day after the cloud-based enterprise event management company agreed to be acquired by affiliates of private equity firm Vista Equity Partners for $1.65 billion in cash.

Toymaker Hasbro (HAS) also showed a strong move to the upside after reporting better than expected first quarter earnings.

On the other hand, shares of Netflix (NFLX) came under pressure amid news that Amazon (AMZN) will offer a standalone streaming video service at a cheaper price.

Sector News

Benefiting from the recovery attempt by the price of crude oil, energy stocks showed a strong move to the upside over the course of the trading session.

Reflecting the strength in the energy sector, the NYSE Arca Oil & Gas Index surged up by 1.7 percent, while the Philadelphia Oil Service Index climbed by 1.3 percent.

Considerable strength also emerged among biotechnology stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Biotechnology Index.

Within the biotech sector, Medivation (MDVN) posted a standout gain after the Sunday Times reported AstraZeneca (AZN) has held internal talks about making a bid for the cancer treatment company.

Software, trucking, and tobacco stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index plunged by 3.4 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets moved higher over the course of the session. While the German DAX Index advanced by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index rose by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries showed a modest move to the downside on the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 2.1 basis points to 1.773 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to the latest earnings news, with IBM (IBM) and Netflix among the companies releasing their quarterly results after the close of today's trading.

Goldman Sachs (GS), Harley-Davidson (HOG), Johnson & Johnson (JNJ), and UnitedHealth (UNH) are due to report their results before the start of trading on Tuesday.

Traders are also likely to keep an eye on the release of the Commerce Department's report on new residential construction in the month of March.