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U.S. Stocks Pull Back Off Record Highs But Remain Mostly Positive

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After an early move to the upside, stocks have given back some ground but remain mostly positive in mid-day trading on Monday. With the early advance, the major averages all reached record intraday highs.

Currently, the major averages are holding on to moderate gains. The Dow is up 108.73 points or 0.4 percent at 27,456.09, the Nasdaq is up 35.94 points or 0.4 percent at 8,422.34 and the S&P 500 is up 12.08 points or 0.4 percent at 3,078.99.

The early strength on Wall Street came as traders remain hopeful about a U.S.-China trade agreement, with Commerce Secretary Wilbur Ross expressing optimism phase one of a trade deal could be signed this month.

"We're in good shape, we're making good progress, and there's no natural reason why it couldn't be," Ross said in an interview with Bloomberg on Sunday.

Ross called the phase one agreement "particularly complicated" and acknowledged it is "always possible" the signing of the deal could "slip a little bit."

In the interview, Ross also said licenses for U.S. firms to sell components to China's Huawei Technologies would be coming "very shortly."

The comments from Ross come after a report from China's Xinhua News Agency last Friday said U.S. and Chinese trade negotiators have "reached consensus on principles."

President Donald Trump has also continued to express optimism about a trade deal, recently suggesting phase one of an agreement could be signed somewhere in the U.S. as soon as this month.

News on the merger-and-acquisition front has also generate some positive sentiment, with shares of Wright Medical Group (WMGI) soaring after the medical device maker agreed to be acquired by larger rival Stryker (SYK) for $30.75 per share in cash.

Regional banks First Horizon (FHN) Iberiabank (IBKC) are also posting notable gains after agreeing to combine in an all-stock merger of equals.

Meanwhile, shares of Under Armour (UAA) have come under pressure after the athletic apparel maker reported better than expected third quarter results but revealed a federal probe of its accounting practices.

Sector News

Energy stocks continue to turn in some of the market's best performances in mid-day trading amid another sharp increase by the price of crude oil.

After spiking $2.02 to $56.20 a barrel in the previous session, crude for December delivery is jumping $1.09 to $57.29 a barrel.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index are up by 4.9 percent and 4.3 percent, respectively. The NYSE Arca Oil Index is also up by 2.6 percent.

Considerable strength also remains visible among semiconductor stocks, as reflected by the 1.6 percent gain being posted by the Philadelphia Semiconductor Index. The index has reached a new record intraday high.

Financial, transportation and steel stocks are also seeing significant strength on the day, while gold and housing stocks have shown notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index climbed by 0.6 percent, while Hong Kong's Hang Seng Index spiked by 1.7 percent.

The major European markets also showed strong moves to the upside on the day. While the German DAX Index has surged up by 1.4 percent, the French CAC 40 Index jumped by 1.1 and the U.K.'s FTSE 100 Index advanced by 0.9 percent.

In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6 basis points at 1.788 percent.

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