NEW YORK (
) -- Stocks closed slightly higher after a sluggish trading session Monday, as a promising holiday retail spending report offset airline security concerns and tepid interest from foreign buyers for the government's short-term note auction.
Dow Jones Industrial Average
closed up 27 points, or 0.3%, at 10,547.1 while the
added 1.3 points, or 0.1%, to 1127.8 and the
advanced 5.4 points, or 0.2%, to 2291.1.
Trading was light, with the Dow seeing volume of nearly 102 million shares, compared with its 10-day average of 187.4 million and the S&P 500 saw volume of 2.1 billion shares, vs. its 10-day average of 4.2 billion. Only the Nasdaq saw strong trading during Monday's session.
>>Top Five All-Around Value Stocks
The U.S. Treasury sold $44 billion of two-year notes Monday afternoon in an auction that had a high yield of 1.089% and a bid-to-cover ratio of 2.91, compared with an average ratio of 3.07. Foreign central banks and other indirect bidders bought 34.8%, which was down from an average of 46%. Prices on U.S. government debt fell with the 2-Year off 5/32 to yield 1.042% and the benchmark 10-Year off 12/32 to yield 3.850%.
"It was a little bit sloppy for a two-year note auction," said Mary Ann Hurley, vice president and fixed income trader at DA Davidson, pointing to the low support from indirect bidders and the fact that 59.68% of bids were accepted at the high.
"Two-years usually go really well. I thought there would have been a little more support for it at current yields but there wasn't," she said.
On Tuesday, the Treasury will auction $42 billion of 5-Year notes and $32 billion of 7-Year notes on Wednesday.
Stocks finished Thursday with gains in a shortened session ahead of Friday's Christmas holiday, after initial jobless claims and November durable goods data lifted market sentiment.
"While headline durable goods orders rose just 0.2% in November, the underlying details point to solid demand from households and businesses," said Deutsche Bank chief U.S. economist Joseph LaVorgna, noting that inventory levels are now back to 2006 levels.
"We know from retail sales, motor vehicle sales and household consumption figures that consumer spending is recovering; the durable goods figures suggest that business demand is picking up, as well," he added.
According to the MasterCard Advisors' SpendingPulse report,
retail sales rose 3.6% in the period of Nov. 1 through Dec. 24, although the gain was closer to 1% after adjusting for an extra shopping day between Thanksgiving and Christmas.
"Holiday 2009 was good enough, but has a long way to go with catching up to what the consumer really wants," said NPD Group chief industry analyst Marshal Cohen. "If the economy is truly to recover, not only does the housing and credit market need to recover, but the innovation market for retail products must recover as well."
Online retailers showed particular strength this season, up 15.5%. Consumer electronics, footwear and jewelry were among the most popular gifts. Shares of
finished Monday's session ahead, by 0.6%, 1.3%, and 0.3%, respectively.
Stocks slipped into negative territory during Monday's afternoon trading session as a group linked to Al Qaeda claimed responsibility for the botched attempt to blow up a commercial jet in U.S. airspace, throwing airlines into the spotlight. The U.S. government is evaluating air travel security measures after the suspected terrorist smuggled explosives onto a U.S.-bound plane over the holiday weekend. Shares of
, parent company of American Airlines, closed down by 4.8% and United Airlines parent
saw shares fall by 3.4%. Shares of
Delta Air Lines
US Airways Group
also finished lower, by 4.1% and 6.7%, respectively.
With trading expected to be light in the absence of many major
economic releases in the coming days, stocks are likely to trade in a narrow range during the final week of 2009 -- a shortened trading week because of the New Year's Day holiday on Friday.
Tuesday brings the consumer confidence reading for December, which is expected to rise to 53, from 49.5, previously.
soared after the U.S. Treasury Department signaled its support for the mortgage and mortgage-related securities companies by lifting its funding cap for three years. Fannie Mae's rose 21% to close at $1.27 and Freddie Mac's stock gained 27% to $1.60.
Italian candy maker
is still considering a
, the British confectioner that recently turned down a $16.2 billion offer from
Shares of Cal-Maine Foods finished Monday's session up by 8.1% after the egg producer beat analysts' estimates with second-quarter earnings of 67 cents a share, down from its year-ago profit of $1.14 a share.
The dollar remained lower against a basket of currencies with the dollar index most down by 0.1%.
Gold for February delivery added $3.10, or 0.3%. to settled at $1,107.90 an ounce.
Crude oil futures also finished ahead, up by 72 cents, or 0.9%, at $78.77 a barrel.
Overseas, Hong Kong's Hang Seng fell 0.2%, and Japan's Nikkei rose 1.3% on reports that industrial production rose for the ninth consecutive month. The FTSE in London remained closed for the Christmas holiday and the DAX in Frankfurt was up by 0.8%.
-- Written by Melinda Peer in New York