Stocks spent the final few
hours of the session stuck in choppy trade to essentially finish flat for the
day. The lackluster action came despite strength in the tech sector.
The major averages showed
little clear direction on Monday. Large-cap tech issues provided early
leadership and traded with steady strength throughout the session. In turn, the
tech sector, which accounts for almost one-fifth of the total weight of the
S&P 500, settled 0.7% higher. The broader market failed to follow, though.
Instead, it remained range bound into the close and finished only fractionally
higher.
Materials were mired in
weakness for almost all of the session. The sector sank to a 1.1% loss as steel
stocks (-3.7%) and diversified metals and miners plays (-4.1%) were dropped
ahead of the latest quarterly report from Dow component Alcoa
(AA 10.87, -0.07). Though Alcoa's announcement marks an unofficial start to
earnings season, reporting doesn't get going in earnest until next week. As has
been the case in recent quarters, most participants will place plenty of
significance on corporate forecasts since such outlooks help diminish the
uncertainty of coming quarters.
Such uncertainty seemed to
keep many on the sidelines. In turn, this session's trading volume was paltry
in that hardly 850 million shares were traded on the NYSE. That's the lowest
total this year.
Those that did trade didn't
have any real cues ahead of Alcoa's announcement. The only item of wide
interest was news that Aon (AON 35.62, -2.72) will pay a mix
of cash and stock to acquire Hewitt Associates (HEW 46.79,
+11.39) for $50.00 per share, which marks a premium of roughly 40% over HEW's
closing price last week. The news sent shares of HEW to a fresh 52-week high,
but dropped shares of AON to a new 52-week low.
The latest Treasury auction
had no real impact on stocks. However, Treasuries gradually gave up their gains
after the release of the auction's results. The $35 billion auction of 3-year
Notes drew a yield of 1.06% and a bid-to-cover ratio of 3.2, which is above the
12-auction average of 3.0. Indirect bidders accounted for about 41%, but that
is below averages of recent auctions.
Commodities had a generally
weak session. In turn, the CRB Commodity Index fell to a 0.9% loss.
Oil suffered some one of the most
pronounced losses. The commodity dropped to a 1.5% loss at $74.95 per barrel
after it had opened pit trade with a modest gain.
Natural gas was weak early on,
but failed to sustain some intraday gains. It closed at $4.39 per MMBtu, down
just 0.2% for the session.
As for precious metals, both
gold and silver prices were sent 0.9% lower. In turn, gold closed pit trade at
$1198.70 per ounce and silver settled at $17.92 per ounce.
Advancing Sectors: Tech (+0.7%), Utilities (+0.3%),
Consumer Staples (+0.3%), Consumer Discretionary (+0.2%)
Declining Sectors: Materials (-1.1%), Industrials (-0.5%),
Health Care (-0.2%), Energy (-0.1%), Telecom (-0.1%)
Unchanged: Financials DJ30 +18.24 NASDAQ +1.91 NQ100 +0.3% R2K
-1.2% SP400 -0.5% SP500 +0.79 NASDAQ Adv/Vol/Dec 808/1.78 bln/1865 NYSE
Adv/Vol/Dec 1072/854 mln/1896