RTTNews - Following the downward move seen at the opening bell, stocks continue to linger in negative territory in afternoon trading on Monday. The major averages are all experiencing a considerable pullback on the day, paring some of the gains posted last week.

The pullback by the markets comes amid a relatively calm day on the economic front, with a lack of significant economic reports prompting some traders to do some profit taking on the session.

Investors also have taken time to read further into last week's employment data and re-evaluate the short-term prospects in the equity market.

In an interview with RTT News, Peter Cardillo, chief market economist at Avalon Partners said, The market has gotten a little ahead of itself here and it needs to rest, says Cardillo.

That's not it for the green arrows though, he said, adding, I'm cautiously optimistic that the rally will continue during the summer months.

I think we're in the second leg of the bull run, Cardillo said, though when asked if this is a bull market - he said, I'm not sure of that just yet.

The major averages have moved off their worst levels of the day in recent trading, although they remain stuck firmly in the red. The Dow is currently down 116.84 at 8,646.29, the Nasdaq is down 28.60 at 1,820.82 and the S&P 500 is down 11.86 at 928.23.

Sector News

Most of the major sectors continue to show notable weakness, contributing to the losses being shown the major indices in afternoon trading.

Health insurance stocks are experiencing a considerable pullback on the day, with the Morgan Stanley Healthcare Payor Sector Index down 4.7 percent. With the loss, the index has dropped to its worst intraday level in one week and is poised to end the session at its worst closing level in a month.

Helping lead the sector lower are shares of Health Net (HNT), which are down by 6.3 percent. The day's decline has placed the stock at its worst level in just over a month.

Gold stocks also continue to post steep losses, with the Amex Gold Bugs Index dropping by 2.8 percent. With the day's loss, the index continues to back off of ten ten-month high set earlier this month, as traders are taking profits in commodities following the late-May run up.

Subsequently, steel, oil service, and natural gas stocks are also weak, reflecting the recoil in commodity prices on the NYMEX.

Meanwhile, banking stocks are extending their gains in the afternoon, with the S&P Banks Index up by 1.2 percent on the day. The move comes as a number of the nation's leading financial institutions are gearing up to pay back government issued TARP funds.

Stocks In The News

Rite-Aid (RAD) is on the downside after disclosing its intention to offer $400 million of senior secured notes set to mature in 2016. The notes will be unsecured, unsubordinated obligations of Rite Aid and will be guaranteed by all of Rite Aid's subsidiaries. Shares of the retail drugstore giant are down by 6.3 percent, moving off of the eleven month high set in the previous session.

Shares of Barclay's (BCS) are also under pressure after the British financial giant confirmed that it received a few proposals for its iShares and broader Barclays Global Investors businesses. The company added that, as part of assessing such proposals, it has had discussions with a number of parties, including BlackRock Inc. (BLK), regarding the potential sale. Barclay's is down by 3.8 percent in afternoon trading, remaining in a recent trading range.

On the other hand, shares of ManTech (MANT) are rising as traders are reacting favorably to the appointment of Lawrence Prior as the company's President and Chief Operating Officer. ManTech stock is up by 6.7 percent in afternoon dealing, reaching its best intra-day price level in over a month.

In Focus: Corporate News, Fed Buyback

Packaged food supplier General Mills (GIS) is in focus after the company said it is on track to exceed its prior earnings targets for the fiscal year ending May 31, 2009 due to good operating performance and a lower fourth-quarter tax rate.

The forecast, however, assumes no mark-to-market valuation as well as gains from asset sales. The company also provided its initial segmental sales outlook for 2010. The stock is up 4.3 percent in afternoon trading.

Meanwhile, shares of fast food giant McDonald's Corp. (MCD) are moving lower after the company announced that its global comparable sales rose 5.1 percent in May 2009.

Shares of McDonald's are currently down 2.4 percent, as U.S. sales came in well short of expectations. In the U.S., comparable sales grew 2.8 percent in May.

Meanwhile, a group of Indiana pension funds have filed an emergency appeal with the U.S. Supreme Court to delay the sale of bankrupt automaker Chrysler LLC to a group led by Italian automaker Fiat. The court's decision on whether to stay the closing of the deal is expected later today.

Additionally, the annual Apple Worldwide Developers Conference is set to kick off at 1:00 p.m. ET in San Francisco, with the tech world hoping for a Steve Jobs sighting following reports last week indicating he will return to work later this month.

The Federal Reserve continued its treasury buyback program Monday, completing the first of two quantitative easing moves for the week. The New York arm of the Federal Reserve purchased $7.50 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.

The day's buyback saw a total of $29.97 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $153.02 billion since the program began on March 25th.

Some speculation has risen as to whether the Fed will raise interest rates to combat the effects of expected inflation following its quantitative easing actions.

In other news, standard & Poor's downgraded Ireland's credit rating for the second time this year, citing fears that the government is set to incur a higher-than-expected cost for supporting banks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished Monday's session on a mixed note. Japan's benchmark Nikkei 225 Index rose by 1.0 percent, while Hong Kong's Hang Seng closed down by 2.3 percent.

Meanwhile, the major European markets finished notably lower. The U.K.'s FTSE 100 Index closed down by 0.8 percent, while the French CAC 40 Index and the German DAX Index fell by 1.5 percent and 1.4 percent, respectively.

In the bond markets, treasuries are holding in a trading range, posting moderate gains. Subsequently, the yield on the benchmark ten-year note is down to 3.832 percent, a drop of 2.8 basis points on the day.

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