Stocks saw moderate weakness during trading on Monday but ended the session well off their worst levels of the day. Lingering economic concerns weighed on the markets, although selling pressure remained relatively subdued.
The major averages moved to the upside going into close, finishing the day well off their lows for the session. The Dow slipped 36.18 points or 0.3 percent to 12,736.29, the Nasdaq edged down 5.56 points or 0.2 percent to 2,931.77 and the S&P 500 dipped 2.22 points or 0.2 percent to 1,352.46.
The modest weakness on Wall Street came as traders expressed continued concerns about the economic outlook following last week's disappointing jobs report.
The report showed much weaker than expected job growth in the month of June, although the economy still added jobs for the twenty-first consecutive month.
Uncertainty about the situation in Europe also generated some selling pressure, as euro zone finance ministers hold another meeting in Brussels.
Ahead of the meeting, Spanish ten-year bond yields climbed above the key 7 percent level, adding to concerns about the high cost of borrowing.
Nonetheless, trading activity was somewhat subdued ahead of the release of aluminum giant Alcoa's (AA) second quarter results after the close of trading. Shares of Alcoa rose 0.5 percent ahead of the news.
The release of results from Alcoa is seen as the unofficial start of the earnings season, as the company is typically the first Dow component to release its results.
A relatively quiet day on the U.S. economic front also kept some traders on the sidelines, although the Federal Reserve release a report showing a bigger than expected increase in consumer credit.
The report showed that consumer credit surged up by $17.1 billion in May following an upwardly revised increase of $10 billion in April. Economists had expected consumer credit to increase by $8.5 billion.
While most of the major sectors ended the session well off their worst levels of the day, significant weakness remained visible among networking stocks. Reflecting the weakness in the networking sector, the NYSE Arca Networking Index fell by 1.5 percent.
Ciena (CIEN) and Acme Packet (APKT) turned in two of the networking sector's worst performances, sliding by 3.7 percent and 3.1 percent, respectively.
Steel stocks also saw considerable weakness amid concerns about the outlook for global demand. The NYSE Arca Steel Index dropped by 1.4 percent, pulling back further off the one-month closing high set last Tuesday.
Electronic storage, semiconductor, and brokerage stocks also posted notable losses but closed off their lows for the session.
Meanwhile, health insurance stocks moved sharply higher, with Amerigroup (AGP) posting a standout gain after agreeing to be acquired by WellPoint (WLP) for $4.9 billion.
In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Monday. Japan's Nikkei 225 Index fell by 1.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.9 percent.
The major European markets also moved to the downside over the course of the trading day. While the U.K.'s FTSE 100 Index slid by 0.6 percent, the German DAX Index and the French CAC 40 Index both ended the day down by 0.4 percent.
In the bond market, treasuries moved moderately higher, extending last Friday's strong upward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 1.513 percent.
Reaction to Alcoa's quarterly results could impact trading on Tuesday, although developments overseas are also likely to be in focus amid a lack of major U.S. economic data.
by RTT Staff Writer
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