U.S. Stocks Recover From Early Weakness Amid Downturn By Bond Yields

After an early move to the downside, stocks have regained ground over the course of the trading session on Monday. The major averages have bounced well off their lows of the session and into positive territory.

Currently, the major averages are posting modest gains. The Nasdaq is up 55.24 points or 0.4 percent at 13,039.05, the S&P 500 is up 8.09 points or 0.2 percent at 4,232.25 and the Dow is up 1.80 points or less than a tenth of a percent at 33,129.08.

Stocks initially came under pressure as treasury yields rebounded amid ongoing concerns about the outlook for interest rates.

Following the pullback seen last Friday, the yield on the benchmark ten-year note moved back to the upside, briefly peeking above the key 5 percent level.

The subsequent turnaround on Wall Street comes as treasury yields have turned lower as the day has progressed, with the ten-year yield falling into negative territory.

Overall trading activity remains somewhat subdued, however, with a lack of major U.S. economic data likely keeping some traders on the sidelines.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes readings on inflation said to be preferred by the Federal Reserve.

Traders are also likely to keep an eye on reports on new home sales, durable goods orders, pending home sales and initial jobless claims in the coming days.

The earnings season also continues to pick up steam this week, with a slew of big-name companies due to report their quarterly results.

Sector News

While most of the major sectors are showing only modest moves on the day, significant strength has emerged among airline stocks.

The NYSE Arca Airline Index has advanced by 1.4 percent, bouncing off its lowest intraday level in over three years.

Housing stocks have also moved to the upside over the course of the session, while weakness remains visible among tobacco and networking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index slumped by 1.5 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index is up by 0.4 percent, the German DAX Index is down by 0.2 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

In the bond, treasuries have shown a notable rebound after coming under pressure in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.4 basis points at 4.880 percent.

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