By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks climbed for a third
session and U.S. Treasury yields fell on Monday as investors took a
downbeat U.S. economic report as relieving some pressure from the
Federal Reserve to tighten monetary policy in September.
The data showing a steep drop in orders for U.S. factory goods
was "really awful," and might be viewed as "a potential negative to
keep the tapering away," said Randy Frederick, managing director of
active trading and derivatives at Charles Schwab.
On the other hand, trading volume is extraordinarily low, so
Monday's tepid climb could also be explained by some bargain
hunting by "a few institutional investors," Frederick added.
Falling as much as 22 points and rising 39, the Dow Jones
Industrial Average (DJI) was lately up 16 points, or 0.1%, at
15,026.51. The S&P 500 index (SPX) rose 2.46 points, or 0.2%,
to 1,665.96, with health care faring best and consumer staples the
worst performing of its 10 major sectors. The Nasdaq Composite
(RIXF) gained 19.61 points, or 0.5%, to 3,677.40.
Treasury prices rose, with the yield on the 10-year note
(10_YEAR) falling 1 basis point to 2.809%.
Orders for U.S. durable goods fell more than expected last
month, down 7.3% in the largest drop in nearly a year. The decline
in bookings for goods intended to last at least three years is the
biggest drop since August 2012 after a 3.9% rise in June, the
Commerce Department said.
Investors are looking at reports on the economy with a
less-than-straight-forward view, given improvement is likely to
bring on reduced monetary easing by the Federal Reserve sooner
rather than later.
The central bank is expected to begin cutting its $85 billion in
monthly bond purchases before the end of the year, with the market
currently debating whether the move would begin in September or
December.
"The August market-correction has been driven by tapering fear
and higher interest rates. It appears to us that tapering is now
almost fully discounted, while Treasury yields may have reached a
ceiling," noted William Riegel, head of equity investment, and Lisa
Black, head of global public fixed-income markets, at TIAA-CREF, in
emailed commentary.
For every three stocks falling, roughly four gained on the New
York Stock Exchange, where 248 million shares traded as of 2:05
p.m. Eastern. Composite volume topped 1.4 billion.
Biotechnology-firm Amgen Inc. (AMGN) rallied 7.9% a day after
the drug maker agreed to buy Onyx Pharmaceuticals Inc. (ONXX) for
about $10.4 billion to gain access to its three cancer drugs.
Shares of Onyx Pharmaceuticals were up 5.7%.
The dollar (DXY) gained against the currencies of U.S. trading
partners, including the euro (EURUSD) .
After rising 1.9% last week, gold futures for December delivery
(GCZ3) lost $2.70, or 0.2%, to settle at $1,393.10 an ounce. The
price of oil fell, with crude futures for October delivery (CLV3)
off 32 cents, or 0.3%, at $106.10 a barrel.
Up nearly 15% on the year and down 3.1% in August, the Dow
industrials on Friday marked a third consecutive weekly drop, the
longest weekly losing streak since mid-November 2012. Both the
S&P 500 and Nasdaq Composite gained last week, with the former
off 1.2% in August but up almost 17% for the year and the latter up
1.4% for the month and nearly 22% year-to-date.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires