After moving lower at the start of trading on Monday, stocks continue to see modest weakness in the early afternoon. While selling pressure has waned from earlier in the session, the markets continue to show a slightly negative bias.
The major averages are currently posting slim losses, well off their lows for the session. The Dow is down 35.80 points or 0.3 percent at 13,002.47, the Nasdaq is down 3.00 points or 0.1 percent at 2,953.34 and the S&P 500 is down 1.05 points or 0.1 percent at 1,368.05.
The modest weakness on Wall Street reflects a negative reaction to election results in France and Greece, which some consider a setback to the progress achieved thus far on the European debt crisis.
Francois Hollande won a run-off election against French President Nicolas Sarkozy and will become France's first Socialist president since 1995.
Hollande has expressed significant opposition to using austerity measures to address the European debt crisis, arguing that the focus should be more on economic growth than cutting government spending.
Additionally, the results of Greek elections pointed to a hung parliament, with no single party getting adequate votes to form a government. Many Greek voters turned to anti-bailout parties.
The focus on the developments in Europe comes amid a light day on the U.S. economic front, although the Federal Reserve is scheduled to release its monthly consumer credit report later this afternoon.
Among individual stocks, Cognizant Technology (CTSH) is under pressure after the information technology services provider reported first quarter earnings growth but lowered its full-year guidance. Shares of Cognizant are down by 16.1 percent.
AIG (AIG) is also trading lower after the company said the Treasury has priced an offering of 163.9 million shares of its common stock at $30.50 per share.
Meanwhile, shares of Tyson Foods (TSN) have moved to the upside after the meat producer reported second quarter earnings that exceeded analyst estimates but on weaker than expected revenues.
Vertex Pharmaceuticals (VRTX) has moved sharply higher after the biotech company released preliminary data showing that its cystic fibrosis combination therapy resulted in significant improvements in lung function. Shares of Vertex have jumped by 46.8 percent.
While most of the major sectors are showing only modest moves, oil service stocks are seeing considerable weakness on the day. The Philadelphia Oil Service Index is down by 1.6 percent after hitting a four-month intraday low earlier in the session.
The weakness among oil service stocks comes as the price of crude oil is extending a recent downward move, pulling back further below the $100 a barrel level. Crude for June delivery is down $1.16 at $97.33 a barrel after hitting a low of $95.34 a barrel.
Gold stocks are also under pressure amid a decrease by the price of the precious metal. With gold for June delivery sliding $7.40 to $1,637.80 an ounce, the NYSE Arca Gold Bugs Index is down by 1.2 percent.
Electronic storage, natural gas, and software stocks are also seeing notable weakness in mid-day trading, although selling pressure remains relatively subdued.
On the other hand, airline stocks have shown a strong move to the upside, driving the NYSE Arca Airline Index up by 1.8 percent. Strength among banking stocks is also helping to limit the downside for the broader markets.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 2.8 percent, while Hong Kong's Hang Seng Index plummeted by 2.6 percent.
Meanwhile, the major European markets showed a notable turnaround after coming under pressure in early trading. The French CAC 40 Index surged up by 1.7 percent, while the German DAX Index crept up by 0.1 percent. The U.K. markets were closed for a holiday.
In the bond market, treasuries have pulled back near the unchanged after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.877 percent after hitting a low of 1.859 percent.
by RTT Staff Writer
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