Stocks Seeing Moderate Weakness Amid Light Trading - U.S. Commentary

(RTTNews) - Stocks have fluctuated over the course of the trading session on Monday and are seeing moderate weakness in mid-day trading. The choppy trading comes after the major averages turned in a mixed performance in the previous week.

Currently, the major averages remain in negative territory. The Dow is down 61.94 points or 0.4 percent at 17,803.40, the Nasdaq is down 31.47 points or 0.6 percent at 4,863.08 and the S&P 500 is down 8.62 points or 0.4 percent at 2,087.45.

Early selling pressure was seen as traders reacted to the mass shooting in a nightclub in Orlando over the weekend, which left 50 people dead.

The attack has raised some concerns about the economy amid worries that Americans may be more reluctant to enjoy the nightlife.

Concerns about Britain leaving the European Union also weighed on the markets ahead of next week's referendum on the so-called Brexit.

Trading activity has remained somewhat subdued, however, with traders looking ahead to the Federal Reserve's monetary policy announcement on Wednesday.

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

While the Fed announcement will be the main focus this week, traders will also be presented with a slew of U.S. economic data.

The reports on retail sales, industrial production, housing starts and producer and consumer price inflation could impact the outlook for future Fed decisions.

Sector News

Airline stocks have come under pressure on the day amid concerns the attack in Orlando could lead to reduced travel. The NYSE Arca Airline Index is down by 2.6 percent, pulling back further off the one-month closing high set last Thursday.

Hawaiian Holdings (HA), China Southern (ZNH), and United Continental (UAL) are turning in some of the airline sector's worst performances.

Considerable weakness has also emerged among biotechnology stocks, as reflected by the 1.6 percent drop by the NYSE Arca Biotechnology Index. The index continues to give back ground after reaching a nearly five-month closing high last Monday.

Electronic storage and software stocks are also seeing notable weakness, while strength remains visible among internet stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index plunged by 3.5 percent, while Hong Kong's Hang Seng Index tumbled by 2.5 percent.

The major European markets also came under pressure on the day. While the U.K.'s FTSE 100 Index slumped by 1.2 percent, the German DAX Index and the French CAC 40 Index plummeted by 1.8 percent and 1.9 percent, respectively.

In the bond market, treasuries have moved to the upside, extending a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down 2.3 basis points at 1.616 percent.