Stocks Roughly Flat After Recovering From Initial Drop - U.S. Commentary

(RTTNews) - After showing a notable decline at the open, stocks have shown a significant rebound over the course of early trading on Monday. The major averages have bounced well off their lows for the young session, with the Nasdaq climbing into positive territory.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 3.54 points or 0.1 percent at 5,051.78, the Dow is down 18.00 points or 0.1 percent at 17,459.40 and the S&P 500 is down 1.50 points or 0.1 percent at 2,090.04.

The initial weakness on Wall Street was partly due to the release of a disappointing report from the New York Federal Reserve on regional manufacturing activity.

The New York Fed said its general business conditions index tumbled to a negative 14.9 in August from a positive 3.9 in July, with a negative reading indicating a contraction in manufacturing activity.

The sharp drop came as a surprise to economists, who had expected the index to climb to a positive reading of 4.8.

With the unexpected decrease, the general business conditions index fell to its lowest level since hitting a negative 19.4 in April of 2009.

Selling pressure waned not long after the open, however, and stocks rebounded amid the release of a separate report from the National Association of Home Builders showing a modest uptick in homebuilder confidence.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 61 in August from 60 in July, in line with economist estimates.

With the modest uptick, the housing market index reached its highest level since hitting a matching reading in November of 2005.

Most of the major sectors are currently showing only modest moves, although considerable strength has emerged among gold stocks. The NYSE Arca Gold Bugs Index has surged up by 2.8 percent amid an increase by the price of gold.

Airline stocks are also seeing some strength in early trading, while weakness remains visible among brokerage and oil service stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.3 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.7 percent.

In the bond market, treasuries have shown a notable move to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 2.159 percent.