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.
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
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