Stocks Continue To Show A Lack Of Direction In Mid-Day Trading - U.S. Commentary

(RTTNews) - With traders seemingly reluctant to make any significant moves, stocks continue to show a lack of direction in mid-day trading on Monday. The choppy trading comes on the heels of the rally that was seen last week.

Currently, the major averages continue to turn in a mixed performance. While the Dow is down 24.79 points or 0.1 percent at 17,365.73, the Nasdaq is up 18.58 points or 0.4 percent at 4,649.32 and the S&P 500 is up 2.32 points or 0.1 percent at 2,020.37.

The lackluster performance on Wall Street comes as some traders are staying on the sidelines ahead of tomorrow's midterm elections. Republicans are expected to increase their majority in the House and potentially retake control of the Senate.

Traders may also be looking ahead to the release of some key economic data later in the week, including the closely watched monthly jobs report.

The Institute for Supply Management released a report this morning showing the U.S. manufacturing activity unexpectedly grew at a faster pace in the month of October.

The ISM said its index of manufacturing activity climbed to 59.0 in October from 56.6 in September, with a reading above 50 indicating growth in the sector. The increase came as a surprise to economists, who had expected the index to dip to 56.0.

With the unexpected increase, the manufacturing index matched the reading reported for August, which is the highest reading for the index since March of 2011.

The U.S. data is at odds with disappointing readings on manufacturing activity in China and Europe, leading to uncertainty about the outlook for the global economy.

A separate report from the U.S. Commerce Department showed an unexpected drop in construction spending in the month of September.

Sector News

While most of the major sectors continue to show only modest moves in mid-day trading, considerable weakness remains visible among steel stocks. The NYSE Arca Steel Index is down by 1.1 percent amid concerns about Chinese demand.

Railroad stocks are also seeing notable weakness on the day, dragging the Dow Jones Railroads Index down by 1 percent. The index is pulling back off the record closing high set last Friday.

A decrease by the price of crude oil is also weighing on energy stocks, with crude for December delivery sliding $0.57 to $79.97 a barrel.

Meanwhile, computer hardware stocks have shown a strong move to the upside, driving the NYSE Arca Computer Hardware Index up by 1.3 percent. The gain is extending a recent uptrend by the index, which has reached a record intraday high.

Networking, semiconductor, and internet stocks are also seeing some strength on the day, contributing to the gain being posted by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Hong Kong's Hang Seng Index fell by 0.3 percent, while China's Shanghai Composite Index rose by 0.4 percent. The Japanese markets were closed for a holiday.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index dropped by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both slumped by 0.9 percent.

In the bond market, treasuries have moved lower on the heels of the upbeat U.S. manufacturing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.8 basis points at 2.373 percent.