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Mixed Economic Data Leads To Mixed Performance On Wall Street - U.S. Commentary

With traders digesting a mixed batch of U.S. economic data, stocks are turning in a mixed performance in mid-day trading on Monday. Initial positive sentiment generated by upbeat retail sales data has been offset by disappointing manufacturing and housing reports.

The major averages have moved roughly sideways in recent trading, stuck on opposite sides of the unchanged line. While the Dow is up 59.72 points or 0.5 percent at 12,909.31, the Nasdaq is down 23.05 points or 0.8 percent at 2,988.28 and the S&P 500 is down 1.57 points or 0.1 percent at 1,368.69.

Stocks showed a strong move to the upside at the start of trading following the release of a report from the Commerce Department showing much stronger than expected retail sales growth in the month of March.

The report showed that retail sales rose by 0.8 percent in March following a revised 1.0 percent increase in February. Economists had been expecting retail sales to increase by a much more modest 0.3 percent.

Excluding a 0.9 percent increase in auto sales, retail sales still rose by 0.8 percent in March compared to a 0.9 percent increase in the previous month.

However, disappointing New York manufacturing data helped to limit the upside for the markets, with a report from the New York Federal Reserve showing that its index of regional manufacturing fell by much more than anticipated in the month of April.

The New York Fed said its general business conditions index plunged to 6.6 in April from 20.2 in March, although a positive reading indicates an increase in manufacturing activity. The index had been expected to edge down to 18.0.

Separately, the National Association of Home Builders reported an unexpected deterioration in homebuilder confidence in the month of April, with the decrease marking the first drop in seven months.

The report showed that the NAHB/Wells Fargo Housing Market Index dropped to 25 in April from 28 in March. The decrease surprised economists, who had expected the index to edge up to 29.

In corporate news, shares of Citigroup (C) are up by 2.1 percent after the financial giant reported first quarter net income of $0.95 per share, down from $0.99 per share in the same quarter a year ago. Excluding special items, Citigroup reported first quarter earnings of $1.11 per share

Sector News

Most of the major sectors are showing only modest moves, although considerable weakness has emerged among oil service stocks. Reflecting the weakness in the oil service sector, the Philadelphia Oil Service Index has fallen by 1.8 percent.

The weakness among oil service stocks comes amid a decrease by the price of crude oil, with crude for May delivery sliding $0.75 to $102.08 a barrel.

Internet stocks have also come under pressure on the day, dragging the NYSE Arca Internet Index down by 1/2 percent. Natural gas and health insurance stocks are also seeing notable weakness.

On the other hand, significant strength has emerged among utilities stocks, as reflected by the 1 percent gain being posted by the Dow Jones Utilities Average. Edison International (EIX) and PG&E Corp. (PCG) are turning in two of the sector's best performances.

Commercial real estate, electronic storage, and pharmaceutical stocks have also moved to the upside, although buying interest remains relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index advanced by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries have shown a strong upward move, rising to their highest levels in over a month. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.6 basis points at 1.952 percent.

by RTTNews Staff Writer

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