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Major Averages Close Mixed After Seeing Early Weakness - U.S. Commentary

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Stocks initially moved to the downside but regained ground over the course of the trading session on Monday. The major averages climbed well off their worst levels of the day, with the Nasdaq and the S&P 500 reaching positive territory late in the session.

Eventually, the major averages ended the session mixed. While the Dow fell 83.97 points or 0.3 percent to 26,341.02, the Nasdaq rose 15.19 points or 0.2 percent to 7,953.88 and the S&P 500 inched up 3.03 points or 0.1 percent to 2,895.77.

Profit taking contributed to the early weakness on Wall Street on the heels of recent strength, with the major averages pulling back following the notable upward move seen last week.

Lingering concerns about a slowdown in the pace of global economic growth inspired traders to cash in on the recent gains.

However, traders seemed reluctant to make significant moves ahead of the start of earnings season, with financial giants JPMorgan Chase (JPM) and Wells Fargo (WFC) due to report their quarterly results before the start of trading on Friday.

Some analysts described the Federal Reserve's decision to downwardly revise its forecast for interest rates as an effort to keep the stock markets afloat amid an expected contraction in first quarter earnings.

The major averages subsequently recovered over the course of the session, although a steep drop by Boeing (BA) kept the Dow in the red.

Boeing tumbled by 4.4 percent after the aerospace giant announced a reduction in productions of its 737 MAX aircraft to 42 per month.

On the U.S. economic front, the Commerce Department released a report showing new orders for manufactured goods fell by slightly less than expected in the month of February.

The report said factory orders dropped by 0.5 percent in February after coming in virtually unchanged in January. Economists had expected orders to slide by 0.6 percent.

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

Gold stocks showed a strong move to the upside, however, with the NYSE Arca Gold Bugs Index climbing by 1.2 percent. The strength in the sector came as gold for June delivery rose $6.30 to $1,301.90 an ounce.

An increase by the price of crude oil also contributed to some strength among oil service stocks, while tobacco, utilities, and biotechnology stocks moved lower.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index climbed by 0.5 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index crept up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index fell by 0.4 percent.

In the bond market, treasuries showed a modest move to the downside over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.8 basis points at 2.519 percent.

Looking Ahead

Trading activity is likely to remain relatively subdued on Tuesday, with another light day on the U.S. economic front likely to keep traders on the sidelines.

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