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Major Averages Posting Modest Gains In Mid-Day Trading - U.S. Commentary


Stocks have rebounded over the course of the trading session on Monday after showing an initial move to the downside. The major averages have bounced well off their early lows and into positive territory.

Currently, the Dow is up 14.38 points or 0.1 percent at 23,436.59, the Nasdaq is up 5.26 points or 0.1 percent at 6,756.20 and the S&P 500 is up 1.24 points or 0.1 percent at 2,583.54.

The initial weakness on Wall Street partly reflected concerns about the outlook for tax reform, but selling pressure was subdued amid a quiet day on the U.S. economic front.

The economic calendar picks up in the coming days, with traders likely to keep a close eye on reports on producer and consumer prices, retail sales, industrial production, and housing starts.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Oil service stocks are seeing considerable weakness, however, with the Philadelphia Oil Service Index slumping by 1.8 percent.

The weakness in the oil service sector comes amid a modest decrease by the price of crude oil, as crude for December delivery is falling $0.18 to $56.56 a barrel.

Computer hardware and natural gas stocks have also moved to the downside on the day, while strength is visible among utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on the day. While Japan's Nikkei 225 Index tumbled by 1.3 percent, Hong Kong's Hang Seng Index rose by 0.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index fell by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index dipped by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries are seeing modest strength following the pullback seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by a basis point at 2.390 percent.

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