U.S. Stocks Moving Mostly Lower In Morning Trading

After turning in a strong performance last week, stocks have moved mostly lower in morning trading on Monday. The major averages have all moved to the downside, with the Dow showing a notable decline.

The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 382.50 points or 1.3 percent at 29,527.87, the Nasdaq is down 82.87 points or 0.7 percent at 12,122.98 and the S&P 500 is down 31.77 points or 0.9 percent at 3,606.58.

The weakness on Wall Street may partly reflect profit taking following the strength seen in the markets over the past few sessions.

The upward move seen last Friday lifted the Nasdaq and the S&P 500 to new record closing highs, while the Dow also remains near it best levels.

Negative sentiment may also have been generated in reaction to a report from the National Association of Realtors showing pending home sales in the U.S. unexpectedly decreased in the month of October.

NAR said its pending home sales index slid by 1.1 percent to 128.9 in October after tumbling by 2.0 percent to a revised 130.3 in September.

The continued decline came as a surprise to economists, who had expected pending home sales to jump by 1.0 percent compared to the 2.2 percent slump originally reported for the previous month.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

“Pending home transactions saw a small drop off from the prior month but still easily outperformed last year’s numbers for October,” said NAR’s chief economist Lawrence Yun. “The housing market is still hot, but we may be starting to see rising home prices hurting affordability.”

A report from Reuters indicating the Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies is also weighing on the markets.

Reuters said a recent executive order issued by President Donald Trump would prevent U.S. investors from buying securities of the listed firms starting late next year.

Meanwhile, traders have largely shrugged off the latest upbeat news regarding a potential coronavirus vaccine.

Moderna (MRNA) announced that a phase 3 trial of its vaccine candidate indicates an efficacy of 94.1 percent.

The biotechnology company said it plans to request an Emergency Use Authorization from the FDA and conditional approval from the European Medicines Agency today.

Oil stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Oil Index down by 3.6 percent. The index continues to give back ground after ending last Tuesday’s trading at its best closing level in over five months.

The weakness among oil stocks comes amid a decrease by the price of crude oil, with crude for January delivery slipping $0.31 to $45.22 a barrel.

Considerable weakness is also visible among airline stocks, as reflected by the 3 percent slump by the NYSE Arca Airline Index.

Oil service, housing and gold stocks are also seeing significant weakness, moving lower along with most of the other major sectors.

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 fell by 0.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index is down by 0.2 percent and the U.K.’s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries are showing a lack of direction after ending the previous session in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 0.849 percent.

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