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Stocks Seeing Modest Strength In Mid-Day Trading - U.S. Commentary

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After initially showing a lack of direction, stocks have moved modestly higher over the course of the trading session on Monday. Buying interest has remained somewhat subdued, however, limiting the upside for the markets.

Currently, the major averages are holding on to slim gains. The Dow is up 11.40 points or 0.1 percent at 21,425.74, the Nasdaq is up 15.02 points or 0.2 percent at 6,168.10 and the S&P 500 is up 3.42 points or 0.1 percent at 2,428.60.

Traders seem reluctant to make more significant moves ahead of Federal Reserve Chair Janet Yellen's semiannual testimony before Congress.

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

The comments from the Fed Chief could have a significant impact on the outlook for interest rates ahead of the central bank's monetary policy meeting later this month.

Remarks by several other Fed officials may also attract attention this week along with reports on retail sales, industrial production and producer and consumer prices.

Among individual stocks, shares of ClubCorp Holdings (MYCC) are moving sharply higher after the private golf club operator agreed to be acquired by Apollo Global (APO) for $1.1 billion in cash.

Phone company Hawaiian Telcom (HCOM) is also posting a substantial gain after agreeing to be acquired by Cincinnati Bell (CBB) for $30.75 per share or about $650 million.

On the other hand, shares of Abercrombie & Fitch (ANF) have shown a steep drop on news the apparel retailer has ended talks with potential buyers.

Sector News

Gold stocks have shown a significant move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.9 percent. The index is bouncing off its lowest closing level in six months.

The rebound by gold stocks comes amid an increase by the price of the precious metal, with gold for August delivery rising $3.50 to $1,213.20 an ounce.

Considerable strength has also emerged among steel stocks, as reflected by the 1.6 percent advance by the NYSE Arca Steel Index. U.S. Steel (X) is posting a standout gain.

On the other hand, biotechnology stocks continue to see notable weakness in mid-day trading, resulting in a 1.6 percent drop by the NYSE Arca Biotechnology Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

The major European markets also 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 closed up by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries are regaining ground after trending lower over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 2.368 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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