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

(RTTNews) - After moving sharply higher over the past few sessions, stocks have moved back to the downside during trading on Monday. The major averages have all moved lower, although selling pressure appears somewhat subdued.

Currently, the major averages are off their lows of the session but still in negative territory. The Dow is down 221.21 points or 0.5 percent at 47,495.21, the Nasdaq is down 104.64 points or 0.5 percent at 23,261.04 and the S&P 500 is down 23.73 points or 0.4 percent at 6,825.36.

The pullback on Wall Street comes as some traders look to cash in on last week's rally, which saw the major averages stage a significant recovery from the sharp pullback seen earlier in November.

For the holiday-interrupted week, the Nasdaq spiked by 4.9 percent, the S&P 500 surged by 3.7 percent and the Dow jumped by 3.2 percent.

The major averages have closed higher for five consecutive sessions, clawing their way back toward their record highs.

Stocks have recently benefitted from renewed optimism about the outlook for interest rates following dovish comments from leading Federal Reserve officials.

CME Group's FedWatch Tool is currently indicating an 87.6 percent chance the Fed will lower interest rates by another quarter point at its monetary policy meeting next week.

However, the release of key U.S. economic data in the coming days could impact Fed officials' thinking, potentially keeping traders on edge.

The Institute for Supply Management released a report this morning unexpectedly showing a modest decrease by its reading on U.S. manufacturing activity in the month of November.

The ISM said its manufacturing PMI slipped to 48.2 in November from 48.7 in October, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.0.

Sector News

Computer hardware stocks are turning in some of the market's worst performances on the day after moving sharply higher last week, with the NYSE Arca Computer Hardware Index tumbling by 2.1 percent.

Significant weakness is also visible among networking stocks, as reflected by the 1.7 percent loss being posted by the NYSE Arca Networking Index.

Biotechnology, utilities and brokerage stocks are also seeing notable weakness, while energy stocks are bucking the downtrend amid a sharp increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slumped by 1.9 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index is down by 1.0 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In the bond market, treasuries have moved notably lower, extending the pullback seen during last Friday's session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.1 basis points at 4.088 percent.