U.S. Stocks Little Changed As Fed Meeting, Inflation Data Loom

Stocks have shown a lack of direction over the course of the trading session on Monday, with the major averages bouncing back and forth across the unchanged line. The choppy trading extends the lackluster performance seen over the two previous sessions.

Currently, the major averages are narrowly mixed. While the Nasdaq is up 26.36 points or 0.2 percent at 17,159.49, the S&P 500 is down 2.34 points or less than a tenth of a percent at 5,344.65 and the Dow is down 93.48 points or 0.2 percent at 38,705.51.

Traders seem reluctant to make significant moves ahead of several key events later this week, including the Federal Reserve’s monetary policy meeting.

The Fed is due to announce its latest monetary policy decision on Wednesday, when the central bank is widely expected to leave interest rates unchanged.

Since the decision is largely seen as a foregone conclusion, traders are likely to pay closer attention to Fed officials’ latest projections for the economy and rates.

Ahead of the Fed announcement, the Labor Department is scheduled to release its report on consumer price inflation in the month of May.

Economists currently expect consumer prices to inch up by 0.1 percent in May after climbing by 0.3 percent in April, while core consumer prices, which exclude food and energy prices, are expected to increase by 0.3 percent for the second straight month.

The annual rate of growth by consumer prices is expected to come in unchanged at 3.4 percent, but the annual rate of core consumer price growth is expected to slow to 3.5 percent in May from 3.6 percent in April.

Reports on producer prices, import and export prices and consumer sentiment and inflation expectations may also attract attention later in the week.

Sector News

Oil service stocks have shown a substantial move to the upside on the day, driving the Philadelphia Oil Service Index up by 2.3 percent.

The rally by oil service stocks comes amid a notable increase by the price of crude oil, with crude for July delivery jumping $1.10 to $76.63 a barrel.

Significant strength is also visible among semiconductor stocks, as reflected by the 1.2 percent gain being posted by the Philadelphia Semiconductor Index.

On the other hand, telecom stocks are adding to the steep losses posted last Friday, dragging the NYSE Arca North American Telecom Index down by 1.9 percent.

Banking stocks are also seeing considerable weakness on the day, resulting in a 1.6 percent decline by the KBW Bank Index. With the drop, the index has fallen to its lowest intraday level in well over a month.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with several markets closed for holidays. Japan’s Nikkei 225 Index advanced by 0.9 percent, while South Korea’s Kospi slid by 0.8 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has tumbled by 1.7 percent, the German DAX Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

In the bond market, treasuries are seeing continued weakness following the sell-off seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 4.465 percent.

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