Stocks Pull Back Off Record Closing Highs - U.S. Commentary

(RTTNews) - Following the rally seen last Friday, stocks gave back ground during trading on Monday. The decrease on the day came after the major averages ended the previous session at record closing highs.

The major averages ended the day firmly in negative territory. The Dow slid 177.23 points or 0.7 percent to 26,439.48, the Nasdaq fell 39.27 points or 0.5 percent to 7,466.52 and the S&P 500 dropped 19.34 points or 0.7 percent to 2,852.53.

Profit taking contributed to the weakness on Wall Street, as some traders looked to cash in on the recent strength in the markets.

Selling pressure was somewhat subdued, however, with traders reluctant to sell stocks and miss out on any further upside.

The Federal Reserve's monetary policy announcement on Wednesday and the release of the Labor Department's closely watched monthly jobs report on Friday may also be keeping some traders on the sidelines.

On the U.S. economic front, the Commerce Department released a report showing personal income rose by slightly more than expected in the month of December.

The Commerce Department said personal income climbed by 0.4 percent in December after rising by 0.3 percent in November. Economists had expected another 0.3 percent increase.

The report also said personal spending rose by 0.4 percent in December following a 0.8 percent increase in the previous month. The spending growth matched expectations.

Sector News

Gold stocks moved sharply lower over the course of the trading session, resulting in a 3.7 percent slump by the NYSE Arca Gold Bugs Index.

The weakness among gold stocks comes amid a notable decrease by the price of the precious metal, with gold for February delivery tumbling $11.80 to $1,340.30 an ounce.

Significant weakness was also visible among housing stocks, as reflected by the 3.1 percent drop by the Philadelphia Housing Sector Index.

Energy, commercial real estate and trucking stocks also moved to the downside, moving lower along with most of the other major sectors.

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 0.6 percent, while Australia's S&P/ASX 200 Index rose by 0.4 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index both edged down by 0.1 percent.

In the bond market, treasuries showed a notable move to the downside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 2.699 percent.