RTTNews - Stocks are extending their stay in the red in mid-afternoon trading on Monday amid renewed concerns about near-term economic conditions. The major averages remain firmly in negative territory, although were able to slow their pullback after this morning's plunge.
The day's retreat comes after the World Bank cut its worldwide gross domestic product estimates, dampening optimism regarding an imminent economic recovery.
Further, traders may be doing some profit taking ahead of forthcoming data that will likely guide market sentiment. Trader focus will be on the Federal Reserve's policy meeting along with some key housing, employment and personal spending figures set to be released later this week.
In other news, President Barack Obama announced an agreement with the pharmaceutical industry that aims to reduce Medicare drug costs.
The major indices have been rangebound in recent trading, stuck in negative territory but off their worst levels of the day. The Dow is currently down 162.79 at 8,376.94, the Nasdaq is down 52.07 at 1,775.40 and the S&P 500 is down 23.27 at 897.96.
A majority of the Dow components are pulling back by considerable margins, contributing to the triple digit loss being shown by the blue chip index in mid-afternoon trading.
One of the Dow's worst performers is Alcoa (AA), which is down by 7.1 percent on the session. With the loss, Alcoa is pulling back further off the five month high set earlier this month.
Financial service stocks are also sliding on the day, led by Bank of America (BAC), which is down by 7.3 percent on the day. American Express (AXP) and JP Morgan Chase (JPM) are also posting notable loses, falling by 4.6 percent and 4.1 percent, respectively.
Additionally, shares of Caterpillar (CAT) are extending their recent slide, falling by 3.5 percent. With the retreat, the stock is falling for the sixth session in a row, reaching its worst level in roughly 2 months earlier in the day.
Comparable weakness is being experienced by shares of General Electric (GE), Microsoft (MSFT) and Disney (DIS), further indicative of the vast variety of losses in today's session. Notably, Disney is down by 3.2 percent and has fallen to its lowest intraday level in nearly seven weeks.
Resource stocks continue to turn in particularly weak performances, with the NYSE Arca Steel Index and the Philadelphia Oil Service Index down by 7.8 percent and 5.8 percent, respectively.
Gold stocks are also under pressure, as reflected by the 5.1 percent loss being shown by the NYSE Arca Gold Bugs Index. Within the sector, Freeport-McMoRan (FCX) is down 9.8 percent, dropping to its lowest intraday level in five weeks.
The recoil in resource related stocks comes amid a drop in commodity prices, with crude oil declining $2.83 to $66.72 per barrel, while gold has plummeted $14.70 to $921.50 an ounce.
Banking, transportation, healthcare and commercial real estate stocks are also giving way, further reflecting the day's assortment of losses.
In Focus: Global GDP, Earnings, Corporate News, Fed Buyback
As mentioned above, the weakness in the markets comes on news that the World Bank reduced its global GDP estimate as well as the outlook for most other economies and warned of a large decline in international capital flows amidst financial market fragility and recession.
The Washington-based lender now expects the world economy to shrink by 2.9 percent this year, larger than its earlier prediction of a 1.7 percent decrease.
On the earnings front, drug store retailer Walgreen (WAG) reported third-quarter earnings that fell to $0.53 per share from $0.58 per share in the year-ago quarter, coming below analyst estimates of $0.56 per share. The stock is down by 5.6 percent as traders react to the news.
Shares of Marvell Technology (MRVL) have also turned lower even though the chip maker raised its second quarter revenue guidance, citing an improvement in demand. The company now expects revenues of $600 to $630 million compared to its previous guidance of $540 to $580 million.
In other news from the tech sector, Apple Inc. (AAPL) announced that it has sold over one million iPhone 3GS models through Sunday, June 21, the third day after its launch. The company said that six million customers have downloaded the new iPhone 3.0 software in the first five days since its release.
Meanwhile, Anglo-Swiss mining company Xstrata has approached rival Anglo American, seeking their consideration regarding a merger of the two companies. If accepted, the merger would create the third largest mining firm in the world.
The Federal Reserve continued its treasury buyback program Monday, completing its first quantitative easing move of the week. The New York Federal Reserve purchased $7.5 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.
The day's buyback saw a total of $20.74 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $177.47 billion since the program began on March 25th.
In overseas trading, stock markets across the Asia Pacific region ended Monday's session showing moderate gains. Japan's benchmark Nikkei 225 Index closed up 0.4 percent, while Hong Kong's Hang Seng Index finished up 0.8 percent.
Meanwhile, the major European markets closed firmly on the downside. The French CAC 40 Index and the German DAX Index both finished down by 3 percent, while the U.K.'s FTSE 100 Index dropped by 2.6 percent.
In the bond markets, treasuries have steadily extended their gains. Subsequently, the yield on the benchmark ten-year note is trading at 3.695 percent, a drop of 9.4 basis points on the day.
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