U.S. Stocks Move Mostly Higher But Nasdaq Bucks The Uptrend

Stocks moved mostly higher during trading on Monday, although the tech-heavy Nasdaq bucked the uptrend. The advance on the day lifted the Dow back within striking distance of last month’s record highs.

The major averages finished the day mixed. While the Nasdaq fell 67.56 points or 0.5 percent to 13,895.12, the Dow climbed 238.38 points or 0.7 percent to 34,113.23 and the S&P 500 rose 11.49 points or 0.3 percent to 4,192.66.

The strength on Wall Street partly reflected recent upward momentum, which helped propel the S&P 500 and the Nasdaq to new record highs last week.

Largely upbeat earnings and economic news has contributed to positive sentiment on Wall Street in recent sessions, although buying interest has been somewhat subdued.

Traders remain optimistic about the economic outlook, but analysts have raised some concerns about valuations and a potential correction.

Reopening plays saw notable strength on the day after New York Governor Andrew Cuomo announced capacity limits for most businesses in New York, New Jersey and Connecticut will be lifted beginning May 19.

Separately, Florida Governor Ron DeSantis signed an executive order immediately suspending all local COVID-19 emergency mandates in the Sunshine State.

Economic data is likely to attract attention in the coming days, with the Labor Department scheduled to release its closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 988,000 jobs in April after surging up by 916,000 jobs in May. The unemployment rate is also expected to dip to 5.8 percent from 6.0 percent.

Meanwhile, traders largely shrugged off a report from the Institute for Supply Management showing an unexpected slowdown in the pace of growth in U.S. manufacturing activity.

The ISM said its manufacturing PMI slid to 60.7 in April after jumping to a more than 37-year high of 64.7 in March.

While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 65.0.

“Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

Sector News

Gold stocks showed a substantial move to the upside on the day, resulting in a 4.8 percent spike by the NYSE Arca Gold Bugs Index.

The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for June delivery surging up $24.10 to $1,791.80 an ounce.

Significant strength was also visible among energy stocks, which moved higher along with the price of crude oil. Crude for June delivery advanced $0.91 to $64.49 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 4.5 percent, while the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index jumped by 2.9 percent and 2.1 percent, respectively.

Steel, housing and transportation stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Meanwhile, weakness among semiconductor stocks weighed on the tech-heavy Nasdaq, with the Philadelphia Semiconductor Index falling by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, although the Japanese and Chinese markets were closed for holidays. Hong Kong’s Hang Seng Index tumbled by 1.3 percent, while South Korea’s Kospi slid by 0.7 percent.

Meanwhile, most European stocks moved to the upside on the day, with the U.K. markets closed for a holiday. The German DAX Index advanced by 0.7 percent and the French CAC 40 Index climbed by 0.6 percent.

In the bond market, treasuries gave back ground after an early advance but still closed in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.4 basis points to 1.607 percent after hitting a low of 1.578 percent.

Looking Ahead

Economic data may attract attention on Tuesday, with traders likely to keep an eye on reports on the U.S. trade deficit and factory orders.

On the earnings front, Avis Budget (CAT), iRobot (IRBT), Mosaic (MOS), Rambus (RMBS), Sanmina (SANM) and Transocean (RIG) are among the companies releasing their quarterly results after the close of today’s trading.

ConocoPhillips (COP), CVS Health (CVS), DuPont (DD), Pfizer (PFE), Sysco (SYY) and Under Armour (UAA) are also among the companies due to report their results before the start of trading on Tuesday.

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