U.S. Stocks Modestly Higher Amid Light Trading

Stocks have moved modestly higher in morning trading on Monday, adding to the strong gains posted last week. The major averages have all moved to the upside after ending last Friday’s trading narrowly mixed.

Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 19.65 points or 0.1 percent at 34,528.68, the Nasdaq is up 61.32 points or 0.4 percent at 14,175.02 and the S&P 500 is up 6.07 points or 0.1 percent at 4,511.49.

The modest strength on Wall Street may partly reflect recent upward momentum, which helped list the Nasdaq and S&P 500 to their best levels in over a year last week.

Recent encouraging inflation data has added to optimism about the outlook for interest rates ahead of next week’s Federal Reserve meeting.

While the Fed is widely expected to raise rates by another quarter point, traders are hopeful that will mark the final rate hike.

Trading activity has remained somewhat subdued, however, as traders look ahead to the release of some key economic data over the coming days.

Reports on retail sales, industrial production, housing starts and existing home sales are likely to attract attention, as traders look for additional clues about the outlook for the economy and interest rates.

Earnings season will also start to pick up steam this week, with Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), IBM Corp. (IBM), Netflix (NFLX), Tesla (TSLA), Johnson & Johnson (JNJ) and American Express (AXP) among the companies due to report their quarterly results.

On the U.S. economic front, the New York Federal Reserve released a report showing a pullback in the pace of growth in regional manufacturing activity in the month of July.

The New York Fed said its general business conditions index fell to 1.1 in July after surging to 6.6 in June, although a positive reading still indicates growth. Economists had expected the index to drop to zero.

While the broader markets have moved to the upside in morning trading, most of the major sectors are showing only modest moves on the day.

Telecom stocks are extending last Friday’s sell-off, however, with the NYSE Arca North American Telecom Index falling by 1.6 percent to its lowest intraday level in over a month.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index slumped by 0.9 percent, while South Korea’s Kospi fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has tumbled by 1.1 percent, the German DAX Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.824 percent.