Stocks Manage To End Choppy Trading Day Mostly Higher - U.S. Commentary

(RTTNews) - After turning in a lackluster performance throughout much of the session, stocks managed to end Monday's trading mostly higher.

The major averages moved to the upside going into the close, ending the day moderately higher. The Dow edged up 23.57 points or 0.2 percent to 15,639.12, the Nasdaq rose 14.55 points or 0.4 percent to 3,936.59 and the S&P 500 climbed 6.29 points or 0.4 percent to 1,767.93.

The higher close on Wall Street was partly due to strength among commodities stocks, which benefited from more upbeat economic data out of China.

Official data released by the China Federation of Logistics and Purchasing and the National Bureau of Statistics showed that non-manufacturing activity strengthened in October. The non-manufacturing index rose to 56.3 in October from 55.4 in September.

The upbeat reading on Chinese non-manufacturing activity came on the heels of last week's better than expected reading on activity in the Chinese manufacturing sector.

Nonetheless, trading activity was somewhat subdued as traders looked ahead to the release of the U.S. jobs report on Friday along with other upcoming reports on service sector activity, personal income and spending, and consumer sentiment.

With the data seen as old news, the markets largely shrugged off a Commerce Department report on factory orders in August and September.

The report said factory orders jumped by 1.7 percent in September after edging down by 0.1 percent in August. While the increase in orders in September matched economist estimates, orders had been expected to rise by 0.3 percent in the previous month.

The Commerce Department combined the data for August and September into a single report as a result of the government shutdown.

Meanwhile, Dallas Fed President Richard Fisher delivered a speech in Sydney, Australia criticizing the "ineffective" and "counterproductive" U.S. government for hampering the economic recovery.

"The inability of our government to get its act together has countered the pro-cyclical role of the Federal Reserve," Fisher said.

"We have had to carry the ball solo," he added. "This is an unhealthy thing for any central bank and comes with not insignificant risks."

Among individual stocks, shares of Kellogg (K) ended the day up by 0.7 percent after the breakfast cereal maker announced plans to cut 7 percent of its workforce by 2017.

Kellogg also reported better than expected third quarter earnings but said it expects its full-year earnings to be toward the lower end of the previously provided guidance.

Sector News

Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.9 percent. Newmont Mining (NEM) and Yamana Gold (AUY) turned in two of the sector's best performances.

The strength among gold stocks came amid a modest increase by the price of the precious metal, with gold for December delivery inching up $1.50 to $1,314.70 an ounce.

Considerable strength was also visible among steel stocks, as reflected by the 2.3 percent gain posted by the NYSE Arca Steel Index. Buying interest was generated by news that Goldman Sachs upgraded its rating on the steel sector to Neutral from Cautious.

Trucking stocks also moved sharply higher over the course of the session, resulting in a 2.1 percent gain by the Dow Jones Trucking Index.

Airline, housing, and oil stocks also saw notable strength on the day, while significant weakness was visible among electronic storage stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Hong Kong's Hang Seng dipped by 0.3 percent, while Australia's All Ordinaries Index fell by 0.4 percent. The Japanese markets were closed for a public holiday.

Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index rose by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both ended the day up by 0.4 percent.

In the bond market, treasuries moved modestly higher following the notable pullback seen last week. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.602 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to the Institute for Supply Management's report on service sector activity in the month of October.