RTTNews - Stocks are lingering in negative territory in early afternoon trading on Monday, continuing to see modest weakness amid some profit taking on a day with devoid of significant economic news. The major averages are all in negative territory, offsetting only a small portion of the gains posted last week.
The modest pullback comes as traders are awaiting key economic reports later in the week, including data on retail sales, industrial production and weekly jobless claims.
Further, the Federal Open Market Committee will make its interest rate announcement on Wednesday, with the key fed funds rate expected to remain unchanged amid a challenging economic environment.
The major averages have continued their choppy performance in recent trading, lingering below the unchanged line. The Dow is currently down 29.85 at 9,340.22, the Nasdaq is down 6.62 at 1,993.63 and the S&P 500 is down 3.07 at 1,007.41.
Steel and gold stocks are posting notable losses, with the NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index down by 2.5 percent and 1.9 percent, respectively. Despite the pullback, the indices remain stuck in recent ranges amid a lack of conviction in commodity prices.
Housing stocks are also retreating, with the Philadelphia Housing Sector Index posting loss of 2.6 percent. The index is backing off of a ten-month closing high reached on Friday.
Notable weakness has also emerged among railroad stocks, as reflected by the 2 percent loss being shown by the Dow Jones Railroads Index. With the decline, the index is pulling back off the eight-month closing high set late last week.
The sector is being hurt by shares of Union Pacific (UNP), which are down by 2.7 percent and Norfolk Southern (NSC), which is down by 2 percent. The stocks are backing off of multi-month closing highs.
Trucking, semiconductor, networking, and airline stocks are also moving lower, while electronic storage stocks are building on their early gains. The NYSE Arca Disk Drive Index is up by 3.4 percent, reaching its best intraday level in over ten months.
Additional upside is visible among banking stocks along with natural gas and oil service stocks, which are limiting the losses in the resource sector.
Stocks In The News
Priceline.com Inc. (PCLN) is on the rise in early afternoon trading after the company reported second quarter EPS of $2.02, which topped the consensus estimate of $1.75. The company expects to report third quarter EPS between $2.70 and $2.85, which is above the consensus estimate of $2.52. The stock has jumped by 13.1 percent, reaching a nine-year high.
Dynegy Inc. (DYN) is also gaining after the firm said it agreed to sell certain plants to LS Power Associates L.P. for $1.025 billion in cash along with a portion of class B shares. The company also announced a cost reduction program to generate between $400 million and $450 million over a four-year period. The stock is up by 7.8 percent after setting a five-week high earlier in the session.
On the other hand, shares of Triad Guaranty (TGIC) are plunging after revealing a second quarter loss of $23.91 per share compared to a loss of $3.68 in the prior year quarter. The stock is down by 19.9 percent, backing further away from its best closing level in over nine months.
In Focus: Corporate News
Freddie Mac (FRE) said late Friday that it no longer needs government help at this point, as the mortgage lender posted a positive net worth.
Benefiting from accounting adjustments and gains, Freddie Mac reported a second quarter profit of $821 million on a notable increase in revenues to $7.47 billion from last year's $1.59 billion.
Warren Buffett-owned Berkshire Hathaway (BRKA) reported a 14 percent increase in second quarter earnings, fueled by gains from derivatives trading, which soared to $1.53 billion from $453 million in the second quarter of last year. The firm earned $1,147 per share, while Wall Street analysts expected the company to earn $1,238 per share for the quarter.
Microsoft (MSFT), which recently struck a ten-year deal with Yahoo (YHOO) to share search engine technology and ad revenue, announced an agreement with French ad company Publicis to sell its Razorfish digital advertising unit.
Meanwhile, McDonald's (MCD) announced that its global comparable sales rose 4.3 percent in July, benefiting from a 7.2 percent jump in sales in Europe. U.S. sales rose 2.6 percent primarily due to new products, including McCafé espresso-based coffees, and the continued strength of McDonald's core menu.
In overseas trading, stock markets across the Asia-Pacific region largely turned in strong performances on Monday. Japan's benchmark Nikkei 225 Index rose by 1.1 percent, reaching a ten-month high, while Hong Kong's Hang Seng Index surged up by 2.7 percent.
Meanwhile, the major European markets turned in a mixed performance, with the French CAC 40 Index and the German DAX Index closing down by 0.5 percent and 0.8 percent, respectively, while the U.K.'s FTSE 100 Index rose by 0.7 percent.
In the bond markets, treasuries are seeing notable strength amid the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.804 percent, posting a loss of 5.0 basis points.
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