U.S. Stocks Recover From Initial Slump To Close Slightly Higher

(RTTNews) - Stocks came under pressure early in the session on Monday but regained ground over the course of the trading day. The major averages climbed well off their lows of the session before ending the day modestly higher.

The Dow fell more than 300 points in early trading but ended the day up 137.33 points or 0.3 percent at 42,792.07. The S&P 500 also inched up 5.22 points or 0.1 percent to 5,963.60, while the Nasdaq crept up 4.36 points or less than a tenth of a percent to 19,215.46.

The initial weakness on Wall Street came as traders looked to cash in on last week's rally, which lifted the major averages to their best closing levels in over two months.

Last Monday's news of a U.S.-China trade deal temporarily slashing steep tariffs on each other's goods generated considerable buying interest that carried over throughout much of the week.

Negative sentiment was also generated in reaction to news that Moody's has downgraded the U.S. debt rating by a notch to Aa1 from Aaa.

Moody's said the downgrade reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.

Selling pressure waned over the course of the session, however, as traders seem to remain generally optimistic about the outlook for the markets.

On the U.S. economic front, the Conference Board released a report showing its reading on leading U.S. economic indicators slumped by more than expected in the month of April.

The report said the leading economic index tumbled by 1.0 percent in April after sliding by a downwardly revised 0.8 percent in March.

Economists had expected the leading economic index to decrease by 0.8 percent compared to the 0.7 percent drop originally reported for the previous month.

Gold stocks saw substantial strength on the day, as the price of the precious metal surged in reaction to Moody's downgrade of the U.S. debt rating. Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index jumped by 2.2 percent.

Biotechnology, healthcare and brokerage stocks also saw some strength, while energy stocks moved to the downside despite an increase by the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index fell by 0.7 percent, while South Korea's Kospi slid by 0.9 percent.

Meanwhile, most European stocks moved to the upside over the course of the session after seeing early weakness. The German DAX Index climbed by 0.7 percent and the U.K.'s FTSE 100 Index rose by 0.2 percent, although the French CAC 40 Index closed just below the unchanged line.

In the bond market, treasuries regained ground after an early slump but remained in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.4 basis points to 4.475 percent after reaching a high of 4.562 percent.