RTTNews - Stocks continue to see some weakness in mid-afternoon trading on Monday, despite the day's promising data on new home sales. The major averages are all in negative territory by modest margins, as the pullback on profit taking has been limited by low volume.

With new home prices moving back to the downside, the Commerce Department released a report showing that new home sales in the month of June increased by much more than expected. New home sales jumped by 11 percent, the sharpest increase in nearly nine years.

In earnings news, RadioShack (RSH), Tellabs (TLAB) and Corning (GLW) reported earnings that beat Wall Street estimates, while Verizon Communications (VZ) and Honeywell (HON) announced results that were in-line with expectations. Aetna (AET), however, was one of the major firms whose quarterly earnings fell short of estimates.

The major averages have seen some upside in recent trading but remain stuck in negative territory. The Dow is currently down by 18.06 at 9,075.18 the Nasdaq is down 5.70 at 1,960.26 and the S&P 500 is down 1.29 at 977.97.

Dow Components

A majority of the Dow components are trading in negative territory, contributing to the modest loss being shown by the blue chip index.

Leading the Dow lower are shares of communications giant Verizon, which have fallen by 2.3 percent. With the decline, the stock is pulling back off the three-month closing high set on Friday.

Verizon reported adjusted second quarter net income of $0.63 per share, compared with $0.67 per share a year earlier. Analysts expected the company to report earnings of $0.63 per share.

Further, Microsoft (MSFT) is down by 1.8 percent, moving off of its highest closing level in over nine months, while American Express (AXP) is sliding by 1.7 percent, backing off of its best price in over eight months.

While Merck (MRK), Boeing (BA) and Home Depot (HD) are also turning in weak performances, a 4.2 percent gain by Bank of America (BAC) is helping to limit the downside for the Dow. Despite the strong upward move, the stock remains stuck in a recent range.

Alcoa (AA), General Electric (GE) and Caterpillar (CAT) are also gaining by considerable margins. While General Electric remains in a recent range, Alcoa has reached its best intraday level in over a month and Caterpillar has climbed to its highest intraday price in over six months.

Sector News

Retail stocks are showing notable weakness in mid-afternoon trading, with the S&P Retail Index posting a loss of 1.5 percent. With the loss, the index is pulling back further off the nearly ten-month closing high that it set last Thursday.

RadioShack is dragging the index lower after the firm's second quarter revenues fell by 2.9 percent, coming in at $965.7 million compared to analyst estimates of $977.86 million. The stock has plunged by 5.7 percent, backing off of its best closing level in over nine months.

Health insurance stocks are also extending their stay in negative territory, as reflected by a 1.1 percent pullback by the Morgan Stanley Healthcare Payor Index. The index is pulling back off of its best closing level in nearly a month.

While telecommunications, networking and software stocks are seeing weakness, banking and housing stocks continue to post strong gains

The Kbw Bank Index is up by 2.8 percent, remaining in a recent range, while the Philadelphia Housing Sector Index is advancing by 2.4 percent and reached its best intraday level in over two months. Housing stocks are benefiting from the new home sales report.

In Focus: New Home Sales, Earnings News

As mentioned above, data from the Commerce Department showed that new home sales rose to an annual rate of 384,000 in June from the revised May rate of 346,000. Economists had expected sales to rise to 352,000 from the 342,000 originally reported for the previous month.

The stronger than expected sales growth came amid a pullback in prices, with the median sales price of new houses sold in June falling 5.8 percent to $206,200 from $219,000 in the previous month. The median sales price had increased for two consecutive months.

In earnings news, Tellabs reported adjusted second quarter net earnings of $0.08 per share, compared to $0.04 per share in the same quarter last year. Total revenue declined to $385.4 million from $432.5 million in the same period a year ago. Wall Street analysts expected the company to report earnings of $0.06 per share on revenues of $381.34 million.

Honeywell revealed second-quarter net income of $0.60 per share, compared to $0.96 per share in the same quarter of last year. The results came in line with analyst forecasts of $0.60 per share for the quarter.

Aetna reported adjusted second quarter net income of $0.68 per share, compared to $0.94 per share in the year-ago quarter. The results failed to meet Wall Street expectations, which called for quarterly earnings at $0.78 per share.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished on the upside on Monday. While Japan's benchmark Nikkei 225 Index posted a 1.5 percent gain, Hong Kong's Hang Seng Index rose by 1.4 percent.

The major European markets also ended the day higher after seeing some volatility. The German DAX Index rose by 0.4 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index both eked out 0.2 percent gains.

In the bond markets, treasuries continue to linger in negative territory. Subsequently the yield on the benchmark ten-year note is trading at 3.727 percent, a gain of 5.7 basis points on the day.

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