By continuing to use this site you consent to the use of cookies on your device. Find out more about our cookie policy and the types of cookies we use by clicking here

Bargain Hunting Contributes To Strength On Wall Street - US Commentary

WASHINGTON (Alliance News) - Stocks moved notably higher over the course of the trading session ...

Alliance News 17 April, 2017 | 9:14PM
Email Form

WASHINGTON (Alliance News) - Stocks moved notably higher over the course of the trading session on Monday, regaining some ground following the decline seen last week. The major averages closed firmly in positive territory, snapping a three-session losing streak.

At the close of trading, the major averages were at or near their best levels of the day. The Dow jumped 183.67 points or 0.9% to 20,636.92, the Nasdaq advanced 51.64 points or 0.9% to 5,856.79 and the S&P 500 climbed 20.06 points or 0.9% to 2,349.01.

Bargain hunting contributed to the strength on Wall Street, with traders picking up stocks at reduced levels after the Dow and the S&P 500 ended last Thursday's trading at their lowest closing levels in two months.

Traders largely shrugged off ongoing geopolitical concerns as well as the release of a batch of disappointing US economic data.

The National Association of Home Builders released a report showing a bigger than expected pullback in homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 68 in April after jumping to 71 in March. Economists had expected the index to edge down to 70.

The bigger than expected decrease by the index came after it reached its highest level since June of 2005 in the previous month.

A separate report released by the New York Federal Reserve showed that the pace of growth in regional manufacturing activity slowed more than expected in April.

While the markets were closed on Friday, the Commerce Department released a report showing a modest drop in retail sales in the month of March.

The report said retail sales dipped by 0.2% in March after a revised 0.3% decline in February. Economists had expected sales to edge down by 0.1% compared to the 0.1% uptick originally reported for the previous month.

Excluding a notable decrease in auto sales, retail sales came in unchanged for the second consecutive month. Ex-auto sales had been expected to rise by 0.2%.

A separate report from the Labor Department showed an unexpected decrease in consumer prices in the month of March.

Sector News

Banking stocks showed a substantial move to the upside as the day progressed, driving the Dow Jones Banks Index up by 2%. The index rebounded after ending the previous session at its lowest closing level in well over four months.

M&T Bank (MTB) helped to lead the sector higher after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

Considerable strength was also visible among housing stocks, as reflected by the 1.5% gain posted by the Philadelphia Housing Sector Index. With the advance, the index reached an eleven-month closing high.

Tobacco, railroad, semiconductor, and internet stocks also saw significant strength on the day, moving higher 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. Japan's Nikkei 225 Index crept up by 0.1%, while China's Shanghai Composite Index fell by 0.7%.

Meanwhile, most European markets remained closed on the day for Easter Monday.

In the bond market, treasuries came under pressure going into the close after showing a lack of direction for much of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.252%.

Looking Ahead

Earnings news may move into the spotlight on Tuesday, with Netflix (NFLX) and United Continental (UAL) releasing their quarterly results after the close of today's trading.

Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), and UnitedHealth (UNH) are also among the companies due to release their results before the start of trading on Tuesday.

Trading could also be impacted by reaction to reports on housing starts and industrial production as well as comments by Kansas City Federal Reserve President Esther George.

Copyright RTT News/dpa-AFX

Email Form
About Author Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.