RTTNews - Stocks continue to see substantial weakness in mid-afternoon trading on Monday, with the major averages stuck firmly in negative territory after showing a steep decline earlier in the session.

The significant move to the downside seen in morning trading came as traders cashed in on some of the market's recent gains, with some disappointing economic data raising concerns that stocks have come too far too fast.

While selling pressure has waned since then, buying interest has remained subdued, leaving the major averages stuck well below the unchanged line.

In afternoon trading, investors have largely shrugged off a report from the National Association of Home Builders showing a deterioration in homebuilder confidence in the month of June.

The report showed that the National Association of Home Builders/Wells Fargo Housing Market Index fell to a reading of 15 in June from a reading of 16 in May. Economists had been expecting the index to edge up to a reading of 17.

Additionally, President Barack Obama spoke earlier in the day, discussing his plans for reforming this country's health care system at the American Medical Association's annual meeting. However, the markets didn't appear to pay much attention to the president's remarks.

The major averages have remained stuck in a narrow range throughout the afternoon, lingering near their worst levels of the day. The Dow is currently down 196.95 at 8,602.31, the Nasdaq is down 1.809.87 and the S&P 500 is down 24.18 at 922.03.

Dow Components

Nearly all of the Dow components are trading in negative territory in mid-afternoon trading, contributing to the steep loss being shown by the blue chip index.

Reflecting weakness among resource stocks, Alcoa (AA) is turning in one of the Dow's worst performances, with the aluminum producer currently down 6.3 percent. With the loss, Alcoa is moving further off the seven-month closing high it set last Thursday.

Shares of DuPont (DD) have also come under considerable selling pressure, falling to their worst intraday level in almost two months. DuPont is currently down 4.9 percent.

Caterpillar (CAT), Merck (MRK), and Pfizer (PFE) are among the other Dow components that are posting notable losses. Shares of Caterpillar are down 4.7 percent, while shares of Merck and Pfizer are down 4.5 percent and 4.3 percent, respectively.

On the other hand, American Express (AXP) is currently the only Dow component that is above the unchanged line, with the credit card giant currently up 1.2 percent. The gain by AmEx comes after it closed lower in the three previous sessions.

Sector News

A variety of sectors continue to show substantial weakness in mid-afternoon trading, reflecting broad based selling pressure following recent strength in the markets.

With the price of oil showing a steep decline, oil service stocks continue to post particularly steep losses. The Philadelphia Oil Service Index is currently down 3.7 percent, pulling back further off the eight-month closing high that it set last Thursday.

The losses by oil service stocks come as crude for July delivery is currently down $1.59 at $70.45 a barrel after hitting a low of $69.58 a barrel. The price of oil reached a nearly eight-month high of $73.23 a barrel last Thursday before giving back some ground.

Most other resource stocks are also under pressure amid the decrease in commodities prices. With gold for August delivery falling $13.20 to $927.50 an ounce, the NYSE Arca Gold Bugs Index is currently posting a 4.3 percent loss.

Considerable weakness also remains visible in most other sectors, with transportation, biotechnology, and housing stocks posting notable losses.

In Focus: Obama on Healthcare, New York Fed Index, Russian Finance Minister

As mentioned above, President Barack Obama warned Monday that failure to reform the health care system would bankrupt the nation. Comparing the country to General Motors, the President warned that the U.S. would face a similar outcome if health care costs continue rising.

If we do not fix our healthcare system, America may go the way of GM, paying more, getting less and going broke, Obama told the American Medical Association's annual meeting in Chicago.

The speech was designed to gather AMA support for Obama's health care goals, including the public option. The AMA has yet to support the public option, and Obama's discussion of government health care received only scattered applause at the conference.

The public option is a health insurance exchange where private plans compete with a public option that drives down costs and expands choice, the White House said.

In economic news, a report from the New York Federal Reserve showed a continued deterioration in conditions for New York manufacturers in the month of June, with the index of activity in the sector falling by much more than expected.

The New York Fed said its general business conditions index fell to a negative 9.4 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10.

While the index fell by more than economists had been expecting, it remains well above the record low of negative 38.2 set in March.

Despite the weak economic data, the U.S. dollar is moving higher against most major currencies, contributing to the pullback by commodities and some of the weakness on Wall Street. The greenback is benefiting from comments from Russian Finance Minister Alexei Kudrin.

Speaking on the sidelines of a meeting of the Group of Eight finance ministers in Italy, Kudrin said his country has full confidence in the U.S. dollar, adding that the dollar's role as the main reserve currency was unlikely to change in the near future.

Other Markets

In overseas trading, most stock markets across the Asia Pacific region ended Monday's trading in the red, as traders did some profit taking. After trending higher in recent weeks, Japan's benchmark Nikkei 225 Index fell nearly 1 percent.

The major European markets also showed notable moves to the downside over the course of the trading day. The U.K.'s FTSE 100 Index fell 2.6 percent, while the French CAC 40 Index and the German DAX Index closed down 3.2 percent and 3.5 percent, respectively.

Meanwhile, treasuries are seeing considerable strength as some traders move their money out of stocks and into bonds. Subsequently, the yield on the benchmark ten-year note is currently down 7.3 basis points at 3.715 percent.

For comments and feedback: contact editorial@rttnews.com