Stocks Regain Ground But Remain Mostly Negative - U.S. Commentary

(RTTNews) - After coming under pressure in early trading, stocks have regained some ground over the course of the trading session on Monday but remain mostly negative. The losses on the day come on the heels of the strength seen last week.

Currently, the major averages are well off their worst levels of the day but still in the red. The Dow is down 70.33 points or 0.4 percent at 16,395.97, the Nasdaq is down 16.47 points or 0.4 percent at 4,597.48 and the S&P 500 is down 8.47 points or 0.4 percent at 1,931.77.

The weakness on Wall Street comes amid a sharp drop by the price of crude oil as well as the release of some disappointing Chinese manufacturing data.

Crude oil for March delivery is currently tumbled $1.78 to $31.84 a barrel after rising $0.33 or 0.1 percent to $33.62 a barrel in the previous week.

The pullback by the price of crude comes after a report from the Chinese National Bureau of Statistics showed that the Chinese manufacturing sector contracted at a faster rate in January,

The report said the index of activity in the Chinese manufacturing sector edged down to 49.4 in January from 49.7 in December. The non-manufacturing index also slipped, easing 0.9 points to 53.5.

On the U.S. economic front, the Commerce Department released a report showing that personal income rose in line with economist estimates in December, although the report also said personal spending came in virtually unchanged.

The report said personal income climbed by 0.3 percent in December, matching the increase seen in November as well as economist estimates.

Meanwhile, the Commerce Department said personal spending edged down by less than 0.1 percent in December after rising by 0.5 percent in the previous month. Spending had been expected to inch up by 0.1 percent.

A separate report from the Institute for Supply Management showed that U.S. manufacturing activity continued to contract in January.

The ISM said its purchasing managers index inched up to 48.2 in January from a downwardly revised 48.0 in December, but a reading below 50 continues to indicate a contraction in manufacturing activity.

Economists had expected the index to climb to a reading of 48.3 from the 48.2 originally reported for the previous month.

The Commerce Department also released a report showing that construction spending rose less than expected in the month of December.

Sector News

Energy stocks are seeing considerable weakness on the day, moving lower along with the price of crude oil.

The NYSE Arca Natural Gas Index is down by 3.7 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index have fallen by 3.2 percent and 2.6 percent, respectively.

Significant weakness is also visible among biotechnology stocks, as reflected by the 1.9 percent drop by the NYSE Arca Biotechnology Index. With the loss, the index is on pace to end the session at its lowest closing level in well over a year.

Steel, tobacco, and banking stocks are also under pressure, while gold, computer hardware and utilities stocks have moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index jumped by 2 percent, while Hong Kong's Hang Seng Index fell by 0.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index dropped by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index both dipped by 0.4 percent.

In the bond market, treasuries are giving back some ground after moving notably higher last week. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 1.959 percent.