After moving sharply lower in early trading on Monday, stocks remain mostly negative in the mid-afternoon. While profit taking contributed to the initial weakness in the markets, selling pressure has waned since then.
With no major economic reports and limited news on the corporate front, traders initially cashed in the market's recent gains. The major averages all moved sharply lower, with the Dow and the S&P 500 pulling back off the four-month closing highs set last Friday.
While the Nasdaq also moved sharply lower, it staged a notable recovery over the course of the morning, climbing back near the unchanged line. The rebound by the Nasdaq came after it underperformed the other major averages last week.
Benefiting from strength among technology stocks, the Nasdaq has bounced back and forth across the unchanged line since then, while the Dow and the S&P 500 have remained firmly negative.
Banking stocks helped to lead the way lower in early trading after U.S. Bancorp (USB), BB&T (BBT), and Capital One (COF) all revealed plans to sell common stock in order to raise proceeds to repay funds received under the government's financial bailout program.
In other news, President Barack Obama spoke earlier in the day, commenting on a meeting with representatives of the health care industry, who have promised to cut health care costs by $2 trillion over the next decade.
Faced with the spiraling cost of health care, Obama said that the organizations were brought together by a recognition that health care costs are out of control and reform is not a luxury that can be postponed but a necessity that cannot wait.
The president said that the groups have voluntarily come together to make an unprecedented commitment to cut the rate of growth of national health care spending by 1.5 percentage points each year over the next ten years.
Obama also urged Congress to work to reform health care by the end of the year, stressing that reform went beyond reducing costs.
The major averages have moved roughly sideways in recent trading, stuck on opposite sides of the unchanged line. While the Nasdaq is up 4.93 at 1,743.93, the Dow is down 111.83 at 8,462.82 and the S&P 500 is down 13.42 at 915.81.
A majority of the Dow components remain in negative territory in mid-afternoon trading, helping to keep the blue chip index firmly in the red.
General Motors (GM) is turning in one of the Dow's worst performances, with the auto giant currently down 10.6 percent after the company's CEO said it is more probable that GM will need to file bankruptcy. At its low for the session, GM was at a two-month intraday low.
Reflecting weakness in the banking sector, shares of Bank of America (BAC) are also seeing considerable weakness. Bank of America is currently down 7.2 percent, pulling back further off the four-month closing high it set last Friday.
Other financial stocks within the Dow are also under pressure, with American Express (AXP) and JP Morgan (JPM) down 6.4 percent and 6.1 percent, respectively.
While Chevron (CVX) and Alcoa (AA) are also posting notable losses, strong gains by IBM (IBM) and Hewlett-Packard (HPQ) have helped to limit the downside for the Dow.
After showing considerable strength last week, banking stocks have shown a notable move to the downside over the course of the trading day. The Kbw Bank Index is currently down 4.5 percent after ending last Friday's trading at a four-month closing high.
Capital One is turning in one of the banking sector's worst performances after announcing a public offering of 56 million shares of its common stock. Shares of Capital One are currently down 11 percent after setting a four-month closing high on Friday.
Most of the other major sectors are also showing continued weakness in mid-afternoon trading, with railroad, health insurance, and oil service stocks turning in some of the worst performances. The losses by oil service stocks come as the price of oil pulls back off its recent highs.
On the other hand, significant strength remains visible among healthcare provider stocks, as reflected by the 1.9 percent gain currently being shown by the Morgan Stanley Healthcare Provider Index. Software, biotech, and semiconductor stocks are also posting strong gains.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Monday, as traders cashed in on the recent strength in the markets. However, Japan's benchmark Nikkei 225 Index bucked the downtrend, edging up 0.2 percent.
The major European markets also pulled back off their recent highs, with the U.K.'s FTSE 100 Index closing down 0.6 percent, while the French CAC 40 Index and the German DAX Index fell 1.9 percent and 1 percent, respectively.
In the bond market, treasuries are seeing continued strength in afternoon trading after showing a notable upward move at the open. Subsequently, the yield on the ten-year note is currently down 10.6 basis points at 3.187 percent.
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