Stocks are turning in a lackluster performance in early trading on Monday as traders seem reluctant to make any significant moves. The major averages are lingering near the unchanged line after ending Friday's trading at three-month closing highs.
The major averages are currently turning in a mixed performance, with the Nasdaq up 0.49 points or less than a tenth of a percent at 3,021.35, while the Dow is down 15.26 points or 0.1 percent at 13,192.69 and the S&P 500 is down 1.24 points or 0.1 percent at 1,404.63.
The choppy trading on Wall Street comes as many traders are staying on the sidelines amid uncertainty about the near-term outlook for the markets. A light day on the U.S. economic calendar is also keeping trading activity relatively subdued.
Benefiting from optimism about the possibility of further monetary stimulus, stocks have trended higher over the course of the past two months. However, buying interest has waned over the past few sessions, and traders may need to see an official stimulus announcement before making any significant moves.
Traders are also digesting a report from Japan's Cabinet Office showing weaker than expected Japanese economic growth in the second quarter.
The report showed that Japanese GDP rose by 0.3 percent sequentially in the second quarter. The increase was tame compared to the 0.6 percent growth expected by economists. Annually, GDP rose 1.4 percent, while economists had expected a sharper 2.5 percent increase.
While the report may add to concerns about the outlook for the global economy, it may also add to the optimism about further stimulus.
David Rea, Japan Economist at Capital Economics, said, "Fiscal policy is in no shape to provide additional stimulus, increasing the pressure on the Bank of Japan to further augment its asset purchase program."
"We expect the Bank will extend the program again at least once more this year, probably in October when it publishes its semi-annual report on economic activity and prices," he added.
Most of the major sectors are showing only modest moves, contributing to the lackluster performance being shown by the broader markets.
Nonetheless, notable strength has emerged among gold stocks, as reflected by the 1 percent gain being posted by the NYSE Arca Gold Bugs Index. The strength among gold stocks comes amid a modest increase by the price of the precious metal.
While modest strength is also visible among airline stocks, heath insurance and biotechnology stocks have moved to the downside in early trading.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. While Japan's Nikkei 225 Index edged down by 0.1 percent, Australia's All Ordinaries Index crept up by 0.2 percent.
The major European markets have also turned mixed on the day. The U.K.'s FTSE 100 Index has slipped by 0.3 percent, while the German DAX Index and the French CAC 40 Index have both inched up by 0.1 percent.
In the bond market, treasuries are turning in lackluster performance along with stocks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.644 percent.
by RTT Staff Writer
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