Stocks Continue To Turn In A Lackluster Performance - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks have shown a lack of direction throughout the trading session on Monday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains of less than a tenth of a percent each. The Dow is up 3.63 points at 18,014.31, the Nasdaq is up 1.74 points at 5,071.77 and the S&P 500 is up 0.40 points at 2,107.79.

The choppy trading on Wall Street comes as the release of a mixed batch of U.S. economic data has led to some renewed uncertainty about the outlook for interest rates.

A Commerce Department report released before the start of trading showed a slightly bigger than expected increase in personal income in April, although the report also showed that personal spending was unexpectedly flat.

The report said personal income rose by 0.4 percent in April after coming in unchanged in March. Economists had expected income to climb by 0.3 percent.

Meanwhile, the Commerce Department said personal spending came in unchanged in April following an upwardly revised 0.5 percent increase in March. Spending had been expected to edge up by 0.2 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The April income and spending figures are another reminder that even though their incomes are rising at a healthy pace, households are still reluctant to boost spending more freely."

The Institute for Supply Management also released a report showing that its index of manufacturing activity rose by more than expected in May.

The ISM said its purchasing managers index climbed to 52.8 in May from 51.5 in April, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 51.8.

Additionally, the Commerce Department released a separate report showing that construction spending jumped to a six-year high in April.

The lackluster performance on Wall Street may also reflect traders staying on the sidelines ahead of the release of the more closely watched monthly jobs report on Friday.

Sector News

Most of the major sectors continue to show only modest moves in mid-day trading, contributing to the lack of direction being shown by the broader markets.

Oil service stocks are seeing considerable weakness, however, with the Philadelphia Oil Service Index sliding by 1.1 percent. With the drop, the index has fallen to its lowest intraday level in over a month.

The weakness among oil service stocks comes amid a decrease by the price of crude oil, as crude for July delivery is sliding $0.78 to $59.25 a barrel.

Steel stocks have also come under pressure on the day, dragging the NYSE Arca Steel Index down by 1.1 percent. The index has also fallen to a new one-month intraday low.

On the other hand, commercial real estate stocks have shown a strong move to the upside, resulting in a 1 percent advance by the Morgan Stanley REIT Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 2225 Index closed just above the unchanged line and Hong Kong's Hang Seng Index rose by 0.6 percent, while Australia's All Ordinaries Index fell by 0.7 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index edged up by 0.2 percent.

In the bond market, treasuries have come under pressure on the heels of today's economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.7 basis points at 2.162 percent.