With traders doing some profit taking following recent strength in the markets, stocks are seeing some weakness in mid-morning trading on Monday. Nonetheless, selling pressure has waned from earlier in the trading session.
Stocks moved sharply lower in early trading, as traders cashed in on the recent gains amid some concerns that the markets have come too far too fast in light of continued indications of weakness in the economy.
After showing a strong upward move last week, banking stocks helped to lead the markets lower, with Capital One (COF) showing a notable decline after the company announced a public offering of 56 million shares of its common stock
U.S. Bancorp (USB), BB&T (BBT), and KeyCorp (KEY) are also moving to the downside after announcing common stock offerings to raise capital.
Some negative sentiment has also been generated by news that billionaire investor Warren Buffett's Berkshire Hathaway (BRK-A) reported a first quarter net loss of $1.53 billion compared to a year-ago profit of $940 million.
Berkshire Hathaway's results were hurt by a drop in revenues as well as huge investment and derivative losses primarily on write-downs on investments in ConocoPhillips (COP) shares.
On the other hand, shares of Dish Network (DISH) are currently up 14.2 percent after the satellite TV provider reported first quarter earnings that came in well above analyst estimates despite a net decrease in subscribers.
In recent trading, the major averages have moved well off their lows for the session, with the Nasdaq showing a notable recovery. The Dow is currently down 111.19 at 8,463.46, the Nasdaq is down 7.28 at 1,731.72 and the S&P 500 is down 15.17 at 914.06.
With traders cashing in on recent gains, a variety of sectors have come under pressure over the course of morning trading, reflecting broad based weakness.
After trending higher for much of the past two months, brokerage stocks are seeing considerable weakness, with the Amex Securities Broker/Dealer Index currently down 3.3 percent after ending Friday's trading at its best closing level in over six months.
Ameriprise Financial (AMP) is turning in one of the sector's worst performances, falling 5.9 percent after ending the previous session at a nearly seven-month closing high. Raymond James (RJF) and Jefferies (JEF) are also posting notable losses.
Significant weakness has also emerged among health insurance stocks, as reflected by the 5 percent loss currently being shown by the Morgan Stanley Healthcare Payor Index. The loss by the index comes after it ended the previous session at a seven-month closing high.
Airline, steel, real estate, and oil service stocks have also shown notable moves to the downside over the course of the morning, with the weakness among oil service stocks coming as the price of oil pulls back off its recent highs.
Stocks Driven By Analyst Comments
After closing lower in the two previous sessions, shares of STMicroelectronics (STM) are seeing some further downside in morning trading. STMicroelectronics is currently down 4.6 percent, pulling back further off the more than four-month closing high it set last Wednesday.
The loss by STMicroelectronics comes after UBS downgraded its rating on the chip maker to Sell from Neutral. UBS also downgraded Infineon Technologies, noting that semiconductor stocks have outperformed the broader markets.
Shares of CommScope (CTV) have also come under pressure after UBS downgraded its rating on the communications equipment maker to Neutral from Buy. CommScope is pulling back further off the seven-month closing high it set last Wednesday, falling 8.3 percent.
On the other hand, shares of Stericycle (SRCL) are currently up 4 percent after Robert W. Baird upgraded its rating on the waste management company to Outperform from Neutral. Robert W. Baird also raised its price target for Stericycle to $58 from $55.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Monday, with Hong Kong's Hang Seng Index falling 1.7 percent after trending higher recently. However, Japan's benchmark Nikkei 225 Index bucked the downtrend, edging up 0.2 percent.
The major European markets are currently turning in a mixed performance, with the U.K.'s FTSE 100 Index currently advancing 0.5 percent, while the French CAC 40 Index and the German DAX Index are down 2.2 percent and 1.1 percent, respectively.
In the bond market, treasuries are seeing some strength in morning trading amid the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is currently down 6.7 basis points at 3.226 percent.
For comments and feedback: contact firstname.lastname@example.org