Palm | Kelapa Sawit

After failing to sustain an initial upward move, stocks turned in a relatively lackluster performance over the course of the trading day on Monday. The markets experienced choppy trading after showing a notable move to the downside in recent weeks.

The major averages eventually ended the session modestly higher but well off their best levels of the day. The Dow rose 37.00 points or 0.3 percent to 10,854.65, the Nasdaq climbed 3.54 points or 0.2 percent to 2,345.38 and the S&P 500 edged up 0.29 points or less than a tenth of a percent to 1,123.82.

The initial strength on Wall Street was largely due to bargain hunting, with traders picking up stock at reduced levels following the recent weakness.

Optimism about the possibility of further asset purchases by the Federal Reserve also generated some positive sentiment as Federal Reserve officials meet at the Kansas City Fed's annual conference in Jackson Hole, Wyoming.

Buying interest waned not long after the open, however, as traders continued to express concerns about the debt crisis in Europe and the possibility of a double-dip recession in the U.S.

Traders subsequently looked to cash in on the early strength, pulling the markets down well off their best levels of the day. Stocks moved roughly sideways for the remainder of the session, as traders seemed reluctant to make any significant moves.

The lackluster performance seen over the course of the session may have reflected the lack of major U.S. economic data or corporate news.

Later in the week, trading could be impacted by the release of closely watched reports on new home sales, durable goods orders, and weekly jobless claims.

Traders are also likely to keep a close eye on Federal Reserve Chairman Ben Bernanke's speech on the economy at the conference in Wyoming.

Sector News

Despite the choppy trading, gold stocks posted particularly strong gains on the day, benefiting from another sharp increase by the price of gold. Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index surged up by 4.1 percent to a four-month closing high.

The strength among gold stocks came as gold for December delivery jumped by $39.70 to another new record closing high of $1,891.90 an ounce.

Considerable strength was also visible among trucking stocks, as reflected by the 1.4 percent gain posted by the Dow Jones Trucking Index. With the gain, the index bounced off the nearly one-year closing low it set in the previous session.

While computer hardware, defense, and semiconductor stocks also saw strength on the day, weakness among banking stocks partly offset the gains. The S&P Banks Index fell by 2.4 percent, hitting its worst closing level in over two years.

Goldman Sachs (GS) helped to lead financial stocks lower going into the close after Reuters reported that Goldman CEO Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney. Shares of Goldman fell by 4.7 percent to a two-year low.

Natural gas, healthcare provider, and oil service stocks also came under pressure, with the losses by oil service stocks coming despite a notable increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower over the course of the trading day on Monday. Japan's Nikkei 225 Index fell by 1 percent, while Australia's All Ordinaries Index dropped by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 1.1 percent.

In the bond market, treasuries saw modest weakness on the day but ended the session well off their worst levels. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.7 basis points to 2.088 percent.

Gold futures extended their journey into uncharted territory today, as investors jumped in ahead of Fed Chairman Ben Bernanke's end-of-week speech. Some economists are expecting the central banker to unveil another round of stimulus measures, which bolstered the malleable metal's appeal as a hedge against inflation. Against this backdrop, December-dated gold futures finished $39.70, or 2.1%, higher at a new settlement record of $1,891.90 an ounce. Earlier in the session, the contract rallied to an all-time best of $1,895.00 an ounce.

Levels to Watch in Trading:

Dow Jones Industrial Average (DJIA – 10,854.65) - support at 10,500; resistance at 13,000

S&P 500 Index (SPX – 1,123.82) - support at 1,100; resistance at 1,400

Nasdaq Composite (COMP – 2,345.38) - support at 2,100; resistance at 2,900