After posting strong gains last week, stocks are turning in a relatively lackluster performance in morning trading on Monday. The Dow and the S&P 500 have been bouncing back and forth across the unchanged line, although the tech-heavy Nasdaq is looking to close higher for the seventh straight session.
Currently, the major averages are turning in a mixed performance. While the Dow is down 32.20 points or 0.1 percent at 25,839.26, the Nasdaq is up 34.96 points or 0.4 percent at 9,981.08 and the S&P 500 is up 0.50 points or less than a tenth of a percent at 3,098.24.
The choppy trading on Wall Street comes as traders continue to weigh recent optimism about a quick economy recovery against rising coronavirus cases in the U.S. and other parts of the world.
According to the World Health Organization, more than 183,000 new coronavirus infections were reported globally on Sunday, the biggest single-day increase since the outbreak began.
Brazil has become a major coronavirus hotspot in recent weeks and led the spike in new infections with 54,771 new cases.
The U.S. was next with 36,617 new cases as states in the South, West and Midwest see surges in new infections following recent reopening.
During his speech in Tulsa, Oklahoma, on Saturday, President Donald Trump blamed the jump in new cases on increased testing and suggested he would like to see testing slowed down.
Despite concerns about a “second wave” of the coronavirus, traders generally remain optimistic about the economy following recent retail sales and employment data that far exceeded estimates.
However, the National Association of Realtors released a report this morning showing existing home sales in the U.S. tumbled by much more than anticipated in the month of May.
NAR said existing home sales plunged by 9.7 percent to an annual rate of 3.91 million in May after plummeting by 17.8 percent to a rate of 4.33 million in April. Economists had expected existing home sales to slump by 4.8 percent to a rate of 4.12 million.
Existing home sales declined for the third straight month and are down by 26.6 percent compared to the same month a year ago.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist.
He added, “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”
Most of the major sectors are showing only modest moves, although gold stocks are extending the rally seen in the previous session, driving the NYSE Arca Gold Bugs Index up by 3.9 percent.
The continued strength in the gold sector comes amid another sharp increase by the price of the precious metal, with gold for August delivery soaring $23.70 to $1,776.70 an ounce.
Notable strength has also emerged among software stocks, as reflected by the 1.3 percent gain being posted by the Dow Jones U.S. Software Index. The index is on pace to end the session at a record closing high.
Utilities stocks are also turning in a strong performance in morning trading, while considerable weakness is visible among tobacco, transportation and biotechnology stocks.
Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index is down by 1.1 percent after ending the previous session at a record closing high.
In overseas trading, stock markets across the Asia-Pacific region ended flat to slightly lower during trading on Monday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets have moved to the downside over the course of the session. While the German DAX Index has slid by 0.7 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both down by 0.8 percent.
In the bond market, treasuries are seeing modest strength after ending last Friday’s trading nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 0.681 percent.
Source: Read Full Article