Stocks saw little movement to open the trading week on Monday, as a light economic calendar had traders sitting on the sidelines. The major averages finished on opposite sides of the unchanged mark by minute margins, capping off a lackluster trading session.
With the lack of first-tier economic data, traders looked to comments from Federal Reserve Chairman Ben Bernanke, who spoke before the Economic Club in Washington, D.C.
Bernanke said that while the economy appears to be recovering from last year's financial crisis, it still has "some way to go" before the country can be assured that the recovery is self-sustaining.
The Fed chief noted a rebound in demand for homes and the shrinking inventory of new, unsold homes, adding that the economy should see modest growth that will lower the nation's unemployment rate.
Bernanke warned, however, that the labor market will remain weak and the unemployment rate will decline at a slower rate than would be ideal.
In other news, the Federal Reserve reported that consumer credit fell by $3.5 billion or 1.7 percent to $2.483 trillion in October from $2.486 trillion in September. Economists had been expecting a more significant decrease in credit of about $9.3 billion.
Also today, the Wall Street Journal reported that the Treasury Department plans to cut the projected long-term cost of the TARP program by about $200 billion to $141 billion from the $341 billion previously forecast by the administration.
This afternoon, President Barack Obama said that he is considering using the leftover funds from the TARP program to create jobs and bring down the unemployment rate.
Obama, who spoke to reporters briefly in the Oval Office following a meeting with Turkish Prime Minister Recep Tayyip Erdogan, declined to divulge any details of his plans but said more information would be forthcoming Tuesday when he delivers a speech on the economy.
The major averages all saw subdued movement in late session dealing, finishing near the flat line. The Dow edged up by 1.21 points or less than a tenth of a percent to 10,390.11, while the Nasdaq fell by 4.74 points or 0.2 percent to end at 2,189.61 and the S&P 500 slid by 2.73 points or 0.3 percent to 1,103.25.
Sector News
Despite the lack of significant movement by the major averages, tobacco and telecommunication stocks saw some of the day's strongest outings. The NYSE Arca Tobacco Index and the NYSE Arca Telecommunication Index rose by 1.7 percent and 1.6 percent, respectively. The indices finished at their best levels in over one year's time.
Health insurance, defense and utility stocks also rose, while commercial real estate stocks weighed on the markets. The Morgan Stanley REIT Index lost 2.1 percent, pulling back off of the thirteen and a half month closing high set on Friday.
Banking stocks also fell by notable margins on the day, with the Kbw Bank Index posting a loss of 1.6 percent. The index was hurt by shares of Wells Fargo (WFC), which declined by 2.2 percent. With the retreat, the stock closed at its lowest price in two months.
Gold, brokerage, housing and trucking stocks also fell, offsetting some of the day's gains. The decline by gold stocks came amid another drop in the price of the precious metal.
Dow Components
Boeing (BA) was the strongest percentage gainer in the blue chip index, advancing by 2.1 percent. With the upward move, the stock closed at its best price in fourteen months.
Telecommunication giants Verizon (VZ) and AT&T (T) also rose, posting gains of 1.7 percent and 1.3 percent, respectively. Both stocks closed at their highest levels in eleven months.
On the downside, Bank of America (BAC) was the worst performer in the Dow, falling by 2.4 percent. Despite the pullback, the stock remained rangebound.
Pfizer (PFE) also saw a comparable loss, falling by 2.3 percent. The stock moved further off of the fourteen-month closing high set last Monday.
Other Markets
In overseas trading, stocks markets across the Asia-Pacific region closed on a mixed note on Monday. Japan's benchmark Nikkei 225 Index advanced by 1.5 percent, while Hong Kong's Hang Seng Index fell by 0.8 percent.
The major European markets also closed mixed. The U.K.'s FTSE 100 Index and the German DAX Index fell by 0.2 percent and 0.6 percent, respectively, while the French CAC 40 Index gained 1.1 percent.
In the bond markets, treasuries ended the day modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.448 percent, posting a loss of 3.5 basis points.
Looking Ahead
Tuesday, the economic calendar is relatively empty once again, pointing to another light trading day. Traders may begin positioning themselves for a series of economic reports due out later this week, with reports on weekly jobless claims, retail sales and consumer sentiment due for release.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.