Stocks Seeing Modest Weakness In Early Trading - U.S. Commentary

(RTTNews) - Stocks have moved modestly lower in early trading on Monday, giving back some ground after trending higher over the past few weeks. The major averages have all moved to the downside, although selling pressure has remained relatively subdued.

Currently, the major averages are posting modest losses, near their lows for the young session. The Dow is down 66.73 points or 0.4 percent at 16,385.99, the Nasdaq is down 6.95 points or 0.2 percent at 4,329.27 and the S&P 500 is down 4.19 points or 0.2 percent at 1,873.85.

The early weakness on Wall Street comes on the heels of the release of disappointing Chinese trade data, with a report from the Chinese General Administration of Customs showing that China swung to a trade deficit in February.

With Chinese exports falling 18.1 percent year-over-year in February compared to a 10.1 percent increase in imports, the report showed a trade deficit of $22.98 billion compared to a trade surplus of $31.86 billion in the same month last year.

Combining the data for January and February to smooth out the volatility caused by the Lunar New Year holidays showed that exports fell 1.6 percent but imports rose 10 percent, resulting in a 79.1 percent drop in the trade surplus to $8.89 billion.

The data contributed to a significant sell-off by Chinese stocks, with the Shanghai Composite Index plunging by 2.9 percent.

Nonetheless, trading activity on Wall Street has remained somewhat subdued amid a lack of major U.S. economic data following the slew of data released last week.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "In the U.S., the important economic data of the week doesn't come until Thursday's retail sales and Friday's PPI, and with commodity prices at the highest level since October '12, inflation numbers should now be a focus."

Steel stocks have moved sharply lower, however, with worries about the outlook for Chinese demand weighing on the sector. The NYSE Arca Steel Index has fallen by 2.2 percent, hitting a five-month intraday low.

Gold, housing and defense stocks are also seeing early weakness, while most of the other major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness during trading on Monday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index tumbled by 1.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is up by 0.4 percent, the German DAX Index is down by 0.4 percent and the U.K.'s FTSE 100 Index is down by 0.1 percent.

In the bond market, treasuries are showing a lack of direction amid a quiet day on the U.S. economic front. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is unchanged at 2.79 percent.