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Stocks Regain Ground After Seeing Initial Weakness - U.S. Commentary

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After initially moving to the downside, stocks have regained ground over the course of morning trading on Monday. The major averages have climbed well off their lows of the session, with the Nasdaq and the S&P 500 briefly turning positive.

Currently, the major averages are all in negative territory. The Dow is down 50.47 points or 0.2 percent at 26,509.07, the Nasdaq is down 4.18 points or 0.1 percent at 7,993.88 and the S&P 500 is down 1.08 points or less than a tenth of a percent at 2,903.95.

The initial weakness on Wall Street partly reflected trepidation ahead of the release of quarterly results from a slew of big-name companies in the coming days.

Coca-Cola (KO), Procter & Gamble (PG), Boeing (BA), Facebook (FB), Microsoft (MSFT), Amazon (AMZN), Intel (INTC), and Exxon Mobil (XOM) are just a few of the companies due to report their quarterly results this week.

Selling pressure waned shortly after the start of trading, however, as traders seemed reluctant to make significant moves as they await the release of the earnings news.

The Easter Monday holiday, which has kept many overseas markets closed on the day, has also contributed to light trading activity.

On the U.S. economic front, the National Association of Realtors released a report showing a significant pullback in existing home sales in the month of March.

NAR said existing home sales plunged by 4.9 percent to an annual rate of 5.21 million in March after soaring by 11.2 percent to a revised rate of 5.48 million in February.

Economists had expected existing home sales to tumble by 3.8 percent to a rate of 5.30 million from the 5.51 million originally reported for the previous month.

The bigger than expected pullback came after existing home sales reached their highest level in almost a year in February.

"It is not surprising to see a retreat after a powerful surge in sales in the prior month," said NAR chief economist Lawrence Yun. "Still, current sales activity is underperforming in relation to the strength in the jobs markets."

Most of the major sectors are showing only modest moves, although steel stocks have moved sharply lower in morning trading.

Reflecting concerns about the outlook for global steel demand, the NYSE Arca Steel Index has slumped by 1.7 percent on the day.

Considerable weakness has also emerged among computer hardware stocks, as reflected by the 1.2 percent drop by the NYSE Arca Computer Hardware Index.

Housing and commercial real estate stocks are also moving lower, while energy stocks are jumping along with the price of crude oil.

Crude for May delivery is jumping $1.65 to $65.65 a barrel on news President Donald Trump will no longer grant sanctions waivers to a handful of buyers of Iranian oil.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with several markets closed for holidays. Japan's Nikkei 225 Index inched up by 0.1 percent, while China's Shanghai Composite Index plunged by 1.7 percent.

Meanwhile, the major European markets remain closed on the day for the Easter Monday holiday.

In the bond market, treasuries are giving back ground after moving notably higher last Thursday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by2.1 basis points at 2.581 percent.

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