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Major Averages Close Mixed Following Volatile Session - U.S. Commentary


Stocks saw considerable volatility during trading on Monday, as many traders remained away from their desks amid the Columbus Day holiday. The major averages showed wild swings over the course of the trading session.

Eventually, the major averages ended the day mixed. While the Dow rose 39.73 points or 0.2 percent to 26,486.78, the Nasdaq slid 52.50 points or 0.7 percent to 7,735.95 and the S&P 500 edged down 1.14 points or less than a tenth of a percent to 2,884.43.

The volatility on Wall Street came on the heels of the notable weakness seen over the final two sessions of the previous week.

A jump in treasury yields contributed to the pullback seen late last week, as traders expressed renewed concerns about the outlook for interest rates.

The yield on the ten-year note reached its highest closing level in over seven years last Friday following the release of the monthly jobs report.

Traders seemed reluctant to make significant moves on Monday, as the bond markets were closed along with banks and federal offices.

The holiday also led to a lack of U.S. economic data, although reports on producer and consumer prices are likely to attract attention in the coming days along with speeches by several Federal Reserve officials.

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

Tobacco stocks saw substantial strength, however, with the NYSE Arca Tobacco Index spiking by 9.4 percent to a new record closing high.

A Food and Drug Administration crackdown on e-cigarettes has contributed to significant volatility among tobacco stocks over the past couple weeks.

Commercial real estate stocks also saw notable strength on the day, while weakness among biotechnology, computer hardware, and semiconductor stocks contributed to the drop by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Monday, although the Japanese markets were closed for a holiday. China's Shanghai Composite Index plummeted by 3.7 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.

The major European markets also showed significant moves to the downside on the day. While the German DAX Index plunged by 1.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index slumped by 1.2 percent and 1.1 percent, respectively.

Meanwhile, the bond markets were closed for the Columbus Day holiday following the weakness seen among treasuries over the past few sessions.

Looking Ahead

Trading activity on Wall Street may remain somewhat subdued on Tuesday amid another quiet day on the U.S. economic front.

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