RTTNews - Stocks moved lower at the start of trading on Monday, with the major averages moving into negative territory after posting modest gains last week. The initial weakness came as some traders looked to cash in on the recent strength in the markets.
With commodities prices moving mostly lower, resource stocks are turning in some of the worst performances in early trading. Early weakness has also emerged among housing, airline, banking, and semiconductor stocks.
A lack of significant news has inspired traders to some profit taking, although trading could be impacted by the release of the results of Institute for Supply Management - Chicago's business survey. Economists expect the business barometer index to rise to 48.0 in August from 43.4 in the previous month.
Over the course of the week, the market will have the opportunity to react to a series of economic reports, culminating with the August non-farm employment report on Friday. Additionally, the minutes of the August Federal Reserve meeting along with the Institute for Supply Management's manufacturing and services reports are likely to be in the spotlight.
With payrolls expected to decline by almost as much as they did in July, the unemployment rate is expected to tick up slightly in August, as economists don't expect a quick fix for the ravaged job market. The report is expected to show a decrease of about 225,000 jobs in August.
At the same time, the manufacturing sector has been showing a gradual recovery from a deep contraction and may show an expansion in July. The manufacturing index based on the ISM's national survey is expected to show a reading above 50 after several months of sub-50 readings.
On the corporate front, Baker Hughes (BHI) said it has agreed to acquire BJ Services (BJS) in a deal valued at about $5.5 billion based on closing stock prices on August 28, 2009. Under the terms of the deal, BJ Services stockholders will receive 0.40035 shares of Baker Hughes and $2.69 in cash in exchange for each share of BJ Services common stock.
In the past few minutes, the major averages have edged up off their lows for the young session, although they remain stuck in the red. The Dow is currently down 51.62 at 9,492.58, the Nasdaq is down 15.43 at 2,013.34 and the S&P 500 is down 8.01 at 1,020.92.
For comments and feedback: contact firstname.lastname@example.org