With upbeat retail sales data limiting the desire to cash in on the recent strength in the markets, stocks showed a lack of direction over the course of the trading day on Monday after moving modestly lower in early trading.
The major averages eventually ended the day mixed, with the Dow posting a modest loss. While the Dow dipped 26.81 points or 0.2 percent to 15,091.68, the Nasdaq edged up 2.21 points or 0.1 percent to 3,438.79 and the S&P 500 inched up 0.07 points or less than a tenth of a percent to 1,633.77.
The early weakness on Wall Street was partly due to profit taking, with the major averages giving back some ground after posting strong gains last week.
Selling pressure remained relatively subdued, however, as traders seemed reluctant to sell stocks and miss out on any further upside for the markets.
Upbeat retail sales data also helped to limit the early downside, with a report from the Commerce Department showing an unexpected increase in retail sales in April.
The Commerce Department said retail sales inched up by 0.1 percent in April following a revised 0.5 percent decrease in March.
The modest increase in sales surprised economists, who had expected sales to dip by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.
Core retail sales, which exclude sales of autos, building materials, and gas, rose by 0.5 percent in April compared to an upwardly revised 0.1 percent increase in March.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "Overall, it doesn't look as though January's payroll tax hike put much of a dent in consumption in either the first or second quarters."
"Most recently, the hit to after-tax incomes has been cushioned by the plunge in gasoline prices that has left households with more cash to spend on other items," he added.
Stocks experienced choppy trading for the remainder of the session, as traders seemed reluctant to make any significant moves amid uncertainty about the near-term outlook for the markets.
Sector News
Despite the lackluster performance by the broader markets, significant weakness was visible among gold stocks. Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index tumbled by 2.6 percent.
The losses by gold stocks came amid a modest decrease by the price of the precious metal, with gold for June delivery dipping $2.30 to $1,434.30 an ounce.
Steel and airline stocks also came under pressure on the day, dragging the NYSE Arca Steel Index and the NYSE Arca Airline Index down by 1.3 percent and 1.2 percent, respectively.
Meanwhile, biotechnology stocks showed a strong move to the upside on the day, resulting in a 1.4 percent gain by the NYSE Arca Biotechnology Index. With the gain, the index reached a new record closing high.
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 surged up by 1.2 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.
The major European markets also turned mixed on the day. While the French CAC 40 Index edged down by 0.2 percent, the U.K.'s FTSE 100 Index inched up by 0.1 percent and the German DAX Index closed just above the unchanged line.
In the bond market, treasuries saw modest weakness on the heels of the upbeat retail sales data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 1.923 percent.
Looking Ahead
Trading on Tuesday could be impacted by the release of a report on import and export prices, although activity may be somewhat subdued ahead of the release of a slew of key economic data later in the week.
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