Stocks are seeing modest weakness in mid-morning trading on Monday, although the major averages have moved well off their worst levels of the day. Concerns about the impact of a swine flu outbreak have been partly offset by some positive earnings news.

Before the stat of trading, telecom giant Verizon (VZ) reported first quarter net income of $0.58 per share, compared to $0.57 per share in the year-ago period.

Excluding special items, net income attributable to Verizon was $0.63 per share, compared to $0.61 per share in same quarter last year. On average, analysts expected the company to report earnings of $0.59 per share.

Meanwhile, Whirlpool Corp. (WHR) reported first quarter earnings of $0.91 per diluted share, compared to $1.22 in the prior year quarter. The company reported net sales of $3.57 billion, a decrease of 23 percent from $4.61 billion in the year-ago period. Excluding the impact of foreign exchange translation, first quarter sales declined approximately 14 percent.

In other news, General Motors (GM) presented its updated Viability Plan, which will focus on 4 core brands in U.S. to cut costs. The company also expects to reduce its U.S. dealer count to just over 3,600 by the end of next year.

However, fears surrounding the new swine flu have driven investors to run from shares of travel-related stocks.

While the flu does seem to be spreading, many doctors agree that the swine flu is no more panic worthy than any other breakout of the human flu during flu season.

President Barack Obama said Monday that the spreading swine flu is something that should raise the country's state of alert but should not be seen as a cause for alarm.

As part of remarks made at the National Academy of Sciences, Obama said he is getting regular briefings on the situation and the public will be receiving regular updates.

While the major averages have moved well off their lows for the session, they currently remain stuck in the red. The Dow is currently down 16.97 at 8,059.32, the Nasdaq is down 6.48 at 1,687.81 and the S&P 500 is down 3.78 at 862.45.

Sector News

In response to the swine flu panic, stocks in the airline sector are falling considerably after many have said that unnecessary travel to Mexico is a bad idea. The Amex Airline Index is down 9.5 percent, dragging the index to its lowest level since early April.

Some steel, oil services, and railroad stocks are also suffering notable losses on the day, with the Amex Steel Index down 3.8 percent, while the Philadelphia Oil Services Index and the Dow Jones Railroads Index are suffering losses of 3.6 percent and 2.6 percent, respectively.

Real estate, banking, and oil stocks are also showing noteworthy declines on the session.

Meanwhile, telecom, biotech, and pharmaceutical stocks are some of the biggest gainers of the session. The Amex Telecommunications Index is up 2.5 percent, while the Amex Biotechnology Index and the Amex Pharmaceutical Index are posting gains of 1.6 percent and 1.5 percent, respectively.

Stocks Driven By Analyst Comments

Royal Caribbean (RCL) is down 15.3 percent on Monday after being downgraded at Credit Suisse to Neutral from Outperform. With the decline, the stock has plummeted from the over three and a half month closing high it hit on Friday.

Analysts said positive catalysts, including increased visibility and diminished liquidity concerns, have driven the stock too high.

Additionally, Sonic (SONC) is suffering a loss of 6.2 percent after being downgraded at Goldman Sachs to Sell from Neutral. A recent rally has pushed shares to levels that don't reflect increasing competition and a narrower margin, according to analysts.

Meanwhile, Quest Software (QSFT) is up 3.4 percent following an upgrade at Goldman to Buy from Neutral. Current expectations are extremely low for the company, leaving room for an earnings upside. Analysts also see Quest as a strong brand, especially in the Microsoft tools space.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region closed mostly lower on Monday amid concerns about the impact of the swine flu outbreak. The Japanese market bucked the downtrend, however, with the Nikkei 255 Index edging up 0.2 percent.

The major European markets are also seeing some weakness but have climbed well off their intraday lows. The U.K.'s FTSE 100 Index is down 0.2 percent, while the French CAC 40 Index and the German DAX Index are posting losses of 0.7 percent and 0.6 percent, respectively.

In the bond market, treasuries are showing notable strength, but have come off their highs of the session. Subsequently, the yield on the benchmark 10-year note is down 4.5 basis points at 2.951 percent.

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