Stocks Give Back Ground Following Recent Uptrend - U.S. Commentary

(RTTNews) - Stocks have moved modestly lower in morning trading on Monday, giving back some ground after trending higher in recent sessions. The major averages have all moved to the downside, although selling pressure has remained relatively subdued.

Currently, the major averages remain in the red but off their worst levels of the day. The Dow is down 52.79 points or 0.3 percent at 18,087.65, the Nasdaq is down 9.30 points or 0.2 percent at 4,946.66 and the S&P 500 is down 4.43 points or 0.2 percent at 2,105.87.

The weakness on Wall Street is partly due to profit taking following the strong upward move shown by the markets over the past month.

The Dow and the S&P 500 are pulling back off the record closing high set last Friday, while the Nasdaq is dipping from its best levels since early 2000.

Negative sentiment has also been generated by a report from the National Association of Realtors showing a bigger than expected drop in existing home sales in the month of January.

NAR said existing home sales tumbled 4.9 percent to an annual rate of 4.82 million in January from an upwardly revised 5.07 million in December. Economists had expected existing home sales to fall to a rate of 4.95 million.

With the bigger than expected decrease, existing home sales fell to their lowest rate since hitting 4.75 million last April.

Nonetheless, traders seem somewhat reluctant to make any significant moves ahead of Federal Reserve Chair Janet Yellen's testimony before the House and Senate.

Yellen's remarks over the next two days are likely to be closely analyzed for hints about the outlook for interest rates.

Steel stocks have come under significant selling pressure, dragging the NYSE Arca Steel Index down by 2.5 percent. Ternium (TX) has helped to lead the sector lower, tumbling by 6.8 percent.

Considerable weakness has also emerged among oil service stocks, which are moving lower along with the price of crude oil.

Computer hardware, telecom, and networking stocks are also seeing notable weakness, while some strength is visible among biotech stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Australia's All Ordinaries Index rose by 0.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has fallen by 0.3 percent, the French CAC 40 Index and the German DAX Index are both up by 0.5 percent.

In the bond market, treasuries are seeing considerable strength after pulling back sharply last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.3 basis points at 2.07 percent.