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Major Averages Close Mixed, Nasdaq Reaches New Record High - U.S. Commentary


After failing to sustain an initial upward move, stocks turned mixed over the course of the trading session on Monday. The mixed performance on the day came on the heels of the strong upward seen in the previous session.

The major averages ended the day on opposite sides of the unchanged line. While the tech-heavy Nasdaq rose 27.51 points or 0.4 percent to a new record closing high of 7,588.32, the Dow fell 157.13 points or 0.6 percent to 25,178.61 and the S&P 500 dipped 3.55 points or 0.1 percent to 2,783.02.

The initial strength on Wall Street came as traders continued to react positively to the monthly jobs data released by the Labor Department last Friday.

The Labor Department said non-farm payroll employment surged up by 313,000 jobs in February after jumping by an upwardly revised 239,000 jobs in January.

Economists had expected employment to climb by 200,000 jobs, matching the increase originally reported for the previous month.

Despite the stronger than expected job growth, the unemployment rate held at 4.1 percent in February. The unemployment rate had been expected to dip to 4.0 percent.

The report also said the annual rate of growth in average hourly employee earnings fell to 2.6 percent in February from 2.8 percent in January.

However, traders seemed reluctant to continue pushing stocks higher amid a lack of major U.S. economic data on the day.

In the coming days, reports on consumer and producer price inflation, retail sales, regional manufacturing activity, housing starts and industrial production are likely to attract attention.

Notable declines by Boeing (BA) and Caterpillar (CAT) weighed on the Dow amid concerns about the impact of President Donald Trump's recently imposed tariffs on steel and aluminum imports.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Semiconductor stocks showed a significant move to the upside, however, with the Philadelphia Semiconductor Index climbing by 1 percent. With the gain, the index reached a new record closing high.

Micron Technology (MU) lead the semiconductor sector higher, surging up by 8.8 percent after Nomura raised its price target on the chip maker's stock to $100 per share from $55 per share.

Gold and steel stocks also saw some strength on the day, while modest weakness was visible among banking and oil stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index rallied by 1.7 percent and 1.9 percent, respectively.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index closed just above the unchanged line and the German DAX Index advanced by 0.6 percent.

In the bond market, treasuries moved to the upside after showing a lack of direction for much of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.4 basis points to 2.870 percent.

Looking Ahead

Reaction to the Labor Department's report on consumer prices in the month of February is likely to impact trading on Tuesday.

Consumer prices are expected to rise by 0.2 percent in February after climbing by 0.5 percent in January. Core consumer prices, which exclude food and energy prices, are also expected to edge up by 0.2 percent.

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