Stocks have exhibited a modest decline in today's trading, reversing some of the gains made last week. This is despite the overall subdued sell-off pressure. Currently, major averages are showing a slightly negative trend. The Dow has fallen by 72.91 points (0.2%) to 39,014.47, the Nasdaq by 40.49 points (0.3%) to 16,234.48. Meanwhile, the S&P 500 is down by 2.51 points (0.1%) at 5,134.57.
The current pullback is likely due to traders wanting to capitalize on recent market rises which brought the Nasdaq and S&P 500 to record closing highs last Friday. On the other hand, the absence of significant U.S. economic data keeps trading activity relatively low, as the market awaits key economic events this week.
One such anticipated event is the testimony of Federal Reserve Chair, Jerome Powell to Congress. Investors will be paying close attention for hints on the potential future of interest rates. Powell is scheduled to speak before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
Later in the week, focus will shift towards the Labor Department's February employment report. Due for release on Friday, it's anticipated that the report will show a jobs increase of 200,000 in February, following a surge of 353,000 jobs in January.
In addition, on Tuesday, the Institute for Supply Management (ISM) is expected to release its February service sector activity report. The ISM's services PMI is likely to slightly drop to 53.0 in February from 53.4 in January, although a score above 50 still indicates growth.
This week will also see the release of reports on factory orders, private sector employment, weekly jobless claims, and the U.S. trade deficit, along with Federal Reserve's Beige Book.
On a sectoral level, despite widespread market pullback, gold stocks have performed well today. This is reflected in the NYSE Arca Gold Bugs Index which has risen by 2.4 percent, coinciding with the increase in gold prices. The banking sector has likewise shown considerable strength, with the KBW Bank Index jumping 2.4 percent to reach its highest level in almost a year. However, tobacco stocks have not performed as well.
Regarding international markets, most Asia-Pacific stock markets, including Japan's Nikkei 225 Index and China's Shanghai Composite Index, have made gains during today's trading. In contrast, major European markets, including the U.K's FTSE 100 and German DAX Index, have declined. Bond markets are also trending downwards after several sessions of significant gains, resulting in 4.7 basis points increase in the benchmark ten-year note yield to 4.227 percent.
