RTTNews - Stocks remain mostly negative in mid-afternoon trading on Monday, as near-term economic concerns continue to fuel the day's pullback, most notably in commodity-related stocks. While the Dow has moved well off its lows, the Nasdaq and the S&P 500 have been holding in the red.
The Institute for Supply Management released a report earlier in the day showing that activity in the service sector contracted for the ninth consecutive month in June, although the pace of contraction slowed by even more than economists had been expecting.
The major averages are currently turning in a mixed performance, with the Dow posting a modest gain. While the Dow is currently up 1.13 at 8,281.17, the Nasdaq is down 18.75 at 1,777.77 and the S&P 500 is down 2.97 at 893.45.
A slim majority of the Dow components are currently in positive territory, contributing to the modest gain currently being shown by the blue chip index.
Nonetheless, a notable decline by shares of Alcoa (AA) has helped to limit the upside for the Dow. Shares of the aluminum producer are down by 6.9 percent, reaching their worst intraday price in just over one month.
Bank of America (BAC) is also struggling, down by 4.6 percent on the day. The move comes as the firm revealed that it expects its write-offs for bad loans to rise by 10 percent in the second quarter. Despite the pullback, the stock remains in roughly a three week trading range.
While Intel (INTC) and Boeing (BA) are also posting notable losses, strong gains are visible in shares of American Express (AXP). Shares of the financial giant are up by 5.5 percent on the day, moving off of the two-month closing low set in the previous session.
Further, shares of Merck (MRK), Procter & Gamble (PG), DuPont (DD) and Kraft Foods (KFT) are also posting notable gains, offsetting some of Thursday's heavy losses.
Resource stocks continue to disappoint, with gold and steel stocks falling by comparable margins. The NYSE Arca Gold Bugs Index and the NYSE Arca Steel Index are both currently down 4.8 percent.
In the gold sector, Harmony Gold Mining (HMY) is seeing a sharp loss, falling by 7.8 percent on the day. With the decline, the stock has slipped to its worst intra-day level in over two months.
Oil, oil service and natural gas stocks are also retreating, with a 2.1 percent drop being shown by the NYSE Arca Oil Index. The Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index are also down more than 2 percent each.
The move comes as commodity prices have taken a hit, with the price of oil plunging by $2.73 to $64.00 a barrel.
Semiconductor, networking, housing and healthcare provider stocks are also seeing considerable downside, reflecting the widespread weakness on the day.
Despite the retreat by most sectors, tobacco and commercial real estate stocks are seeing significant strength. The NYSE Arca Tobacco Index has risen 2.3 percent and the Morgan Stanley Real Estate Index has risen by 1.6 percent.
In Focus: Service Sector Data, Corporate News, Fed Buyback, Obama In Russia
As mentioned earlier, the ISM said its index of activity in the service sector rose to 47.0 in June from 44.0 in May, although a reading below 50 indicates a contraction. Economists had been expecting the index to come in at 46.0.
On the corporate front, beleaguered automaker General Motors has been granted permission by a U.S. bankruptcy judge to sell most of its assets to a U.S Treasury-funded buyer.
Food and beverage giant PepsiCo Inc. (PEP), together with its bottling partner Pepsi Bottling Group Inc. (PBG), announced its plans to invest $1 billion in Russia over three years.
EMC (EMC) raised its all-cash offer to acquire Data Domain (DDUP) to $33.50 per share for a total enterprise value of about $2.1 billion. EMC is competing with NetApp (NTAP) to acquire Data Domain.
In other news, the Federal Reserve continued its treasury buyback program Monday, completing its first quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.
The day's buyback saw a total of $18.2 billion in treasuries submitted for purchase. Overall, the Fed has purchased a total of $197.72 billion since the program began on March 25th.
President Barack Obama is attending his first Moscow summit today, meeting with Russian President Dmitry Medvedev to discuss the relationship between the two countries. The leaders reaffirmed their commitment to the common fight against terrorism and drug trafficking in Afghanistan, while reaching an agreement to reduce nuclear weapon stockpiles.
In overseas trading, stock markets across the Asia-Pacific region ended Monday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by 1.4 percent, while Hong Kong's Hang Seng Index slipped by 1.2 percent.
The major European markets also saw notable weakness on the day, with the German DAX Index and French CAC 40 Index both finishing down 1.2 percent. The U.K.'s FTSE 100 Index also fell, posting a loss of 1 percent for the day.
In the bond markets, treasuries have moved back to the upside, with the benchmark ten-year note climbing above the unchanged line. Subsequently, the yield on the ten-year note is trading at 3.498 percent, a drop of less than a basis point.
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