RTTNews - Stocks finished Monday's session little changed, as some traders went bargain hunting in the afternoon following a morning sell-off. The major averages finished on opposite sides of the unchanged line but only by minuscule margins.
The lack of significant movement came as the day's session was marred by low volume and a lull in economic data. Traders did some profit taking early on but were enticed back into the market following some speculation about a near-term economic recovery.
In the news, the annual Apple Worldwide Developers Conference kicked off in San Francisco, with Apple (AAPL) announcing a new web browser, a remodeled MacBook and a fresh version of the iPhone.
In other news, Chrysler's sale of assets to Fiat was be delayed by the U.S Supreme Court. A group of Indiana pension funds have filed an emergency appeal with the court to block the sale.
Packaged food supplier General Mills (GIS) was also in focus after the company said it is on track to exceed its prior earnings targets for the fiscal year ending May 31, 2009 due to good operating performance and a lower fourth-quarter tax rate.
The forecast, however, assumes no mark-to-market valuation as well as gains from asset sales. The company also provided its initial segmental sales outlook for 2010. The stock rose by 4.0 percent on the day, setting its best closing level in over three months.
The Federal Reserve continued its treasury buyback program Monday, completing the first of two quantitative easing moves for the week. The New York Fed purchased $7.50 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.
The day's buyback saw a total of $29.97 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $153.02 billion since the program began on March 25th.
Some speculation has risen as to whether the Fed will raise interest rates to combat the effects of expected inflation following its quantitative easing actions.
Meanwhile, President Barack Obama is ramping up the economic stimulus spending, pledging to create over 600,000 jobs this summer. Obama made the announcement Monday morning, stating that he will accelerate the implementation of the $787 billion stimulus in the next 100 days.
The major averages closed little changed after the day's losses were largely offset by a late session rally. While the Dow finished up by 1.36 or less than a tenth of a percent at 8,764.49, the Nasdaq dipped by 7.02 or 0.4 percent to 1842.40, and the S&P 500 fell 0.95 or 0.1 percent to 939.14.
The late day recovery attempt was partly due to considerable strength that emerged among banking stocks, with the S&P Banks Index closing up 2.2 percent. Housing, retail, and railroad stocks also saw some strength on the day.
On the other hand, health insurance stocks and airline stocks closed notably lower, with the Morgan Stanley Healthcare Payor Sector Index and the Amex Airline Index falling by 3.8 percent and 3.1 percent, respectively.
Internet related stocks also showed a notable move to the downside, with the Amex Internet Index closing down 1.3 on the session. With the loss, the index pulled back well off of the eight month high it set in the previous session.
Steel, chemical, and oil service also saw considerable weakness on the day, with the losses by oil service stocks coming as the price of oil fell $0.35 to $68.09 a barrel.
The Dow components ended the session roughly mixed, resulting in only a mild gain by the blue chip index.
Financial giants American Express (AXP), JP Morgan Chase (JPM) led the way higher in the Dow, climbing by at 2.8 and 2.4 percent.
Bank of America (BAC) also rose, jumping by 1.7 percent on the day. The move came as firms gear up to pay back government issued TARP funds, using recently raised capital from a series of equity offerings.
The Dow was moderated by DuPont (DD), which fell by 2.9 percent on the day. With the retreat, shares of the chemical giant finished at their worst level in over eight weeks.
Shares of McDonald's (MCD) are also dropped after the company announced that its U.S. sales came in well short of expectations, growing by 2.8 percent in May while analysts expected 3.8 percent. Shares of McDonald's slipped by 1.9 percent, partly offsetting recent gains.
In addition, shares of Alcoa (AA) and Pfizer (PFE) also retreated by considerable margins, declining by 1.6 percent and 1.4 percent, respectively.
Meanwhile, new Dow members Cisco (CSCO) and Travelers (TRV) saw a mixed outing, finishing up by 0.6 percent and 1.1 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific region finished Monday's session on a mixed note. Japan's benchmark Nikkei 225 Index rose by 1.0 percent, while Hong Kong's Hang Seng closed down by 2.3 percent.
Meanwhile, the major European markets finished notably lower. The U.K.'s FTSE 100 Index closed down by 0.8 percent, while the French CAC 40 Index and the German DAX Index fell by 1.5 percent and 1.4 percent, respectively.
In the bond markets, treasuries closed modestly lower, unable to hold onto their earlier gains. Subsequently, the yield on the benchmark ten-year note finished at 3.889 percent, an increase of 2.7 basis points on the day.
With a relatively light day on tap for Tuesday, traders may pay a bit more attention to wholesale inventories figures for April set to be released from the Commerce Department. Economists expect inventories to decline 1.1 percent.
Some traders may look to the Treasury Department's auction of $19.0 billion worth of three-year notes set to take place Tuesday afternoon. The bond market has been in focus recently, as the Fed's quantitative easing moves have done little to slow rising yields, causing some concern among investors.
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