Despite Credit Revision, U.S. Stocks Fade At Close

Stocks finished mostly lower Monday, giving in to a late selloff after trading between gains and losses over the final two hours of the day. The U.S. markets got an early boost from better-than-expected Q1 growth in Japan overnight and from Standard & Poor's Rating Service, which Monday morning raised its outlook for the United States to Stable from Negative. The late decline erased small gains for most sectors in the S&P 500, with mining and material stocks the lone sector to hold on to a solid gain on the strength of rising prices for gold and silver Monday. Other commodities ended lower.

Equities rallied early after Japan issued revised Q1 gross domestic product data showing annualized 4.1% growth in Q1, topping expert opinion looking for 3.5% growth. The surprise strenth for the Japense economy helped lift the beaten-down Nikkei Index climb 5%, also supported by Prime Minister Shinzo Abe saying the government will unveil its second growth strategy after the upper house election next month.

U.S. Credit Upgrade
Also contributing to the day's early strength was S&P revising its outlook for the United States to Stable, citing reduced fiscal risks. It left its AA+ rating in place. S&P cut the U.S. ranking from AAA in August 2011, contributing to a global stock-market selloff and sending yields on Treasury bonds to record lows.

Fed Talk
St. Louis Federal Reserve President James Bullard also may have lent mild support to buyers, stating at an economic conference in Montreal that low inflation "has surprised to the downside," and likely meaning the central bank can continue to "pursue its aggressive asset purchase program," according to published reports.

"Labor market conditions have improved since last summer, suggesting the [Federal Open Market] Committee could slow the pace of purchases, but surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame", he said.

Commodities were mixed. Crude oil for July delivery settled 26 cents at $96.77 per barrel while July natural gas was down 3 cents to $3.80 per 1 mln BTU. August gold rose $3 to $1,386 per ounce while July silver added 18 cents to settle at $21.93 per ounce.

Here's Where The Markets Stood At Day's End

• Dow Jones Industrial Average down 9.53 (-0.06%) to 15,238.59
• S&P 500 down 0.57 (-0.03%) to 1,642.81
• Nasdaq Composite Index up 4.55 (+0.13%) to 3,473.77

• Hang Seng Index down 1.02%.
• Shanghai China Composite Index down 1.39%.
• FTSE 100 up 0.09%.

• (+) TPLM, Reports Q1 earnings of $0.10 per share, beating the analyst consensusby $0.05 per share. Revenue climbed 17% over the prior quarter to $34.3 mln, also topping expectations by around $2.8 mln. Quarterly sales volumes rose 284% year over year to 242 mln barrels of oil equivalent.
• (+) STEL, Agrees to $445.1-mln buyout from Union First Market Bankshares Corp (UBSH), with STEL shareholders receiving 0.9739 of a UBSH share for each share they now own and an implied value of $19.50 per share. The combined banks would have $7.1 billion in total assets and the fifth largest branch network in Virginia. UBSH shares are down %.
• (+) MPAA, Expects to report record annual sales of around $213 million for its rotating electrical operations when it files its FY13 results for the 12 months ended in March later this month.

• (-) XIDE, Files for bankruptcy protection in Delaware federal court, listing $1.9 bln in assets and $1.1 bln in liabilities. The car and truck battery-maker expects to operate normally during the restructuring, securing $500 mln in financing from JPMorgan Chase (JPM).
• (-) DVAX, U.S. Food and Drug Administration asks for additional safety data for the company's experimental hepatitis B vaccine, Heplisav. DVAX said it will meet soon with the agency to finalize a protocol for collecting the new data.