Stocks Hit Highs, Then Fade

After hitting record intraday highs, stocks faded during the last hour of Monday’s session, with the S&P 500 closing in the red.

Stocks ran out of energy during the last hour of trading on Monday, as a number of investors appeared reluctant to maintain their positions with Tuesday morning’s release of the Thompson Reuters/University of Michigan Consumer Sentiment Index for November as well as the Case-Shiller Home Price Index. After the Dow, the S&P 500 and Russell 2000 all hit record intraday highs, many investors decided to take profits on the first day of a holiday-shortened week.

The Dow Jones Industrial Average (DIA) picked up 7 points to finish Monday’s trading session at a new record-high closing level of 16,072.54 for a 0.05 percent advance, after reaching a record intraday high of 16.109.63 The S&P 500 (SPY) retreated 0.13 percent to 1,802.48, closing above 1,800 for the second time after hitting a new record intraday high of 1,808.10.

The Nasdaq 100 (QQQ) advanced 0.16 percent to finish at 3,427. The Russell 2000 (IWM) dipped 0.02 percent to 1,124.72 after hitting a new record intraday high of 1,128.52.

In other major markets, oil (USO) fell 0.65 percent to close at $33.82.

On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined 18 cents (0.16 percent) to $110.87/bbl. (BNO).

December gold futures advanced $6.60 (0.53 percent) to $1,250.70 per ounce (GLD).

Transports got off the launching pad ahead of Elon Musk’s Falcon 9 on Monday, with the Dow Jones Transportation Average (IYT) climbing 0.26 percent.

In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks soared on Monday as the yen weakened to 101.89 per dollar just before the closing bell in Tokyo. A weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average jumped 1.54 percent to 15,619 (EWJ).

In China, stocks declined after an explosion at a Sinopec pipeline killed 55 people. The incident caused a drop in crude oil prices. The Shanghai Composite Index declined 0.47 percent to 2,186 (FXI). Hong Kong’s Hang Seng Index dipped 0.05 percent to end the day at 23,684 (EWH).

Stocks climbed in Europe as a result of Iran’s agreement to limit its nuclear program. The development is expected to reduce upward pressure on oil prices, which escalate when tensions with Iran increase. The Euro STOXX 50 Index finished Monday’s session with a 0.55 percent advance to 3,072 – remaining above its 50-day moving average of 2,995. Its Relative Strength Index is 59.71 (FEZ).

Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,736 after declining 0.13 percent to finish Monday’s session at 1,802.48. Its Relative Strength Index declined from 66.53 to 65.28. The MACD is rising just above the signal line, which would suggest that the S&P will continue to advance in the immediate future.

On Monday, three sectors finished in positive territory, five sectors finished in the red, and the technology sector remained unchanged.

Consumer Discretionary (XLY): +0.09%

Technology: (XLK): unchanged

Industrials (XLI): -0.22%

Materials: (XLB): -0.63%

Energy (XLE): -0.91%

Financials: (XLF): +0.14%

Utilities (XLU): -0.39%

Health Care: (XLV): +0.40%

Consumer Staples (XLP): -0.16%

Bottom line: After the Dow, the S&P 500 and the Russell 2000 hit record intraday highs, stocks retreated during the last hour of Monday’s trading session as investors decided to take profits ahead of Tuesday’s economic data.

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