Major Averages Close Narrowly Mixed As Early Buying Interest Fades

Stocks showed a notable move to the upside in morning trading on Monday but gave back ground over the course of the session. The major averages pulled back well off their highs of the session, ending the day narrowly mixed.

After surging as much as 1.2 percent, the tech-heavy Nasdaq showed a significant pullback and closed down 13.27 points or 0.1 percent at 11,675.74.

Meanwhile, the Dow and the S&P 500 pulled back well off their best levels but closed modestly higher. The Dow crept up 40.47 points or 0.1 percent to 33,431.44 and the S&P 500 inched up 2.78 points or 0.1 percent to 4,048.42.

The early strength on Wall Street came as treasury yields moved notably lower amid optimism that the Federal Reserve is close to finishing its aggressive interest rate hikes.

Buying interest waned over the course of the session, however, as treasury yields rebounded ahead of congressional testimony by Federal Reserve Chair Jerome Powell.

Powell is due to testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

The Labor Department’s closely watched monthly employment report is also likely to attract attention later in the week.

Economists currently expect employment to increase by 200,000 jobs in February after jumping by 517,000 jobs in January, while the unemployment rate is expected to hold at 3.4 percent.

Sector News

Steel stocks moved sharply lower over the course of the session, as China set a modest target for economic growth this year, raising concerns about the outlook for demand.

Reflecting the weakness in the sector, the NYSE Arca Steel Index plunged by 2.5 percent after ending last Friday’s trading at a twelve-year closing high.

Considerable weakness also emerged among gold stocks, resulting in a 1.8 percent drop by the NYSE Arca Gold Bugs Index.

The weakness in the gold sector came as the price of the precious metal ended the day unchanged after seeing early weakness.

Natural gas, chemical and housing stocks also came under pressure over the course of the session, while some strength remained visible among airline stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.1 percent, while Hong Kong’s Hang Seng Index crept up by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index rose by 0.3 percent and the German DAX Index climbed by 0.5 percent.

In the bond market, treasuries moved modestly lower over the course of the session after seeing initial strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up 1.9 basis points to 3.983 percent after hitting a low of 3.897 percent.

Looking Ahead

Powell’s testimony before the Senate Banking Committee is likely to be in the spotlight on Tuesday, overshadowing separate reports on wholesale inventories and consumer credit.

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