WASHINGTON (dpa-AFX) - Stocks have shown a lack of direction over the course of the trading session on Monday, with the major averages bouncing back and forth across the unchanged line following the strong gains posted during last week's trading.
Currently, the major averages are narrowly mixed. While the Nasdaq is down 64.22 points or 0.2 percent at 26,626.40, the Dow is up 26.83 points or 0.1 percent at 54,063.76 and the S&P 500 is up 4.56 points or 0.1 percent at 7,762.20.
The choppy trading on Wall Street comes as traders take a step back to assess the recent strength in the markets, which saw the S&P 500 reach a new record closing high last Friday.
Traders may also be reluctant to make significant moves ahead of the release of key U.S. inflation data in the coming days.
The Labor Department is scheduled to release reports on consumer and producer inflation on Wednesday and Thursday, respectively.
On the heels of last Friday's report showing an unexpected decrease in U.S. employment, the data could impact the outlook for interest rates.
'Consensus forecasts point to a modest easing in both headline and core CPI, which, if realized, would reinforce the view that the Fed can afford to remain patient,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, 'That would likely keep downward pressure on Treasury yields and provide further support for risk assets.'
Traders are also keeping an eye on developments in the Middle East, where Iran and Oman are reportedly close on a deal regarding the Strait or Hormuz but Tehran has indicated it is resisting talks with the U.S.
Iran has warned that it will not reopen the Strait of Hormuz unless the United States meets a series of conditions, denting hopes for a return to stability in global energy markets and leading to a sharp increase in crude oil prices.
Sector News
Despite the lackluster performance by the broader markets, energy stocks have moved sharply higher along with the price of crude oil.
With U.S. crude oil futures surging by more than 3 percent, the Philadelphia Oil Service Index is up by 4.1 percent and the NYSE Arca Oil Index is up by 3.7 percent.
Significant strength is also visible among software stocks, as reflected by the 2 percent jump by the Dow Jones U.S. Software Index.
On the other hand, the spike in crude oil prices is contributing to substantial weakness among airline stocks, with the NYSE Arca Airline Index plunging by 3.2 percent.
Housing stocks have also shown a considerable move to the downside, dragging the Philadelphia Housing Sector Index down by 2.2 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index shot up by 2.1 percent, while China's Shanghai Composite Index advanced by 0.7 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index is down by 0.3 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.
In the bond market, treasuries have moved to the downside after ending last Friday's trading slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price is up by 2.8 basis points at 4.688 percent.
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