U.S. Stocks Giving Back Ground Following Last Week’s Rally

Stocks have moved mostly lower in morning trading on Monday, giving back ground following the strong upward move seen last week. The tech-heavy Nasdaq saw some early volatility but has joined the Dow and S&P 500 firmly in the red since then.

Currently, the major averages are just off their lows of the session. The Dow is down 237.18 points or 0.7 percent at 35,733.81, the Nasdaq is down 63.79 points or 0.4 percent at 15,566.81 and the S&P 500 is down 20.67 points or 0.4 percent at 4,691.35.

The weakness on Wall Street may partly reflect profit taking, as traders cash in on some of the strength seen in the markets last week.

The major averages all moved sharply higher last week, with the S&P 500 ending last Friday’s trading at a new record closing high.

Traders may also be moving money out of stocks and into safer havens ahead of the Federal Reserve’s money policy announcement on Wednesday.

The Fed is expected to discuss accelerating the pace of tapering its asset purchase program, with reports suggesting the central bank could double the rate to $30 billion per month.

Oil service stocks have moved sharply lower in morning trading, dragging the Philadelphia Oil Service Index down by 4 percent.

The sell-off by oil service stocks comes amid a decrease by the price of crude oil, with crude for January delivery falling $0.40 to $71.27 a barrel.

Significant weakness has also emerged among airline stocks, as reflected by the 2.7 percent slump by the NYSE Arca Airline Index.

Oil producer, banking and natural gas stocks are also seeing considerable weakness, while biotechnology stocks have shown a notable move to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while Hong Kong’s Hang Seng Index dipped by 0.2 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is up by 0.3 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

In the bond market, treasuries have moved to the upside after ending last Friday’s trading nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5 basis points at 1.439 percent.

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