Stocks Climb Off Worst Levels But Close Mostly Lower - U.S. Commentary

(RTTNews) - After coming under pressure early in the session, stocks regained ground over the course of the trading day on Monday but remained mostly negative. With the drop on the day, the major averages partly offset the strong gains posted last week.

The major averages ended the day firmly in negative territory. The Dow fell 86.11 points or 0.4 percent to 23,909.84, the Nasdaq slid 65.56 points or 0.9 percent to 6,905.92 and the S&P 500 dropped 13.65 points or 0.5 percent to 2,582.61.

Concerns about the global economic outlook contributed to the initial weakness on Wall Street following the release of disappointing Chinese trade data.

Data from China's General Administration of Customs showed exports tumbled by 4.4 percent year-over-year in December, reflecting the biggest drop in two years. Economists had expected exports to increase by 3 percent.

The report also said Chinese imports plunged by 7.6 percent in December compared to the same month a year ago, defying expectations for a 5 percent jump.

ING Greater China Economist Iris Pang said the contraction in Chinese imports and exports "is likely to continue into 2019 due to falling foreign demand, including demand for Chinese-made electronic products."

Selling pressure waned shortly after the start of trading, however, as traders seemed wary of missing out on further upside following the advance seen in recent sessions.

A lack of major U.S. economic data also kept some traders on the sidelines along with uncertainty about the impact of the ongoing government shutdown.

Sector News

Utilities stocks showed a substantial move to the downside on the day, dragging the Dow Jones Utilities Average down by 2.6 percent.

PG&E Corp. (PCG) posted a steep loss after the utility said it plans to file for bankruptcy due to potential liabilities resulting from the 2017 and 2018 Northern California wildfires.

Significant weakness was also visible among pharmaceutical stocks, as reflected by the 1.7 percent drop by the NYSE Arca Pharmaceutical Index.

Biotechnology, semiconductor, and gold stocks also saw considerable weakness on the day, while banking stocks moved to the upside.

Within the banking sector, Citigroup (C) posted a strong gain after reporting fourth quarter earnings that exceeded analyst estimates.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index slid by 0.7 percent, while Hong Kong's Hang Seng Index plunged by 1.4 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slumped by 0.9 percent, the French CAC 40 Index and the German DAX Index fell by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries pulled back into negative territory after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 2.710 percent after hitting a low of 2.672 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to a report on producer price inflation as well as data on New York manufacturing activity.

On the earnings front, Delta Air Lines (DAL), JPMorgan Chase (JPM), UnitedHealth (UNH) and Wells Fargo (WFC) are due to report their quarterly results before the start of trading.