After moving notably lower over the course of early trading on Monday, stocks are seeing continued weakness in the early afternoon. Lingering concerns about the outlook for the global economy are weighing on the markets once again.
The major averages are currently posting notable losses, just off their lows for the session. The Dow is down 81.51 points or 0.6 percent at 12,690.96, the Nasdaq is down 17.12 points or 0.6 percent at 2,920.21, and the S&P 500 is down 7.63 points or 0.6 percent at 1,347.05.
The weakness on Wall Street comes as traders continue to digest last Friday's disappointing U.S. jobs report, which added to recent concerns about the economic outlook.
The report showed much weaker than expected job growth in the month of June, although the economy still added jobs for the twenty-first consecutive month.
Uncertainty about the situation in Europe also continues to weigh on stocks, as euro zone finance ministers are holding another meeting in Brussels.
Bailout financing to Spanish banks, terms of a second bailout for Greece and the feasibility of creating a common regulator for European banks are among the issues likely to be discussed at the meeting.
Ahead of the meeting, Spanish ten-year bond yields climbed above the key 7 percent level, adding to concerns about the high cost of borrowing.
Nonetheless, trading activity is somewhat subdued ahead of the release of aluminum giant Alcoa's (AA) second quarter results after the close of trading. Shares of Alcoa are down 1 percent ahead of the news.
The release of results from Alcoa is seen as the unofficial start of the earnings season, as the company is typically the first Dow component to release its results.
A relatively quiet day on the U.S. economic front is also keeping some traders on the sidelines, although the Federal Reserve is scheduled to release its report on consumer credit at 3 pm ET. Economists expect the report to show that consumer credit rose by $8.5 billion in May.
Reflecting concerns about the outlook for global demand, steel stocks are seeing significant weakness in mid-day trading. The NYSE Arca Steel Index has fallen by 1.6 percent, pulling back further off the one-month closing high set last Tuesday.
Considerable weakness has also emerged among electronic storage stocks, as reflected by the 2.1 percent loss being posted by the NYSE Arca Disk Drive Index. Quantum (QTM) and NetApp (NTAP) are turning in two of the sector's worst performances.
Brokerage stocks have also come under pressure on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.8 percent. Online brokers TD Ameritrade (AMTD) and E*Trade (ETFC) have helped to lead the sector lower.
Networking, semiconductor, and gold stocks are also posting notable losses, moving to the downside along with most of the major sectors.
Meanwhile, health insurance stocks are bucking the downtrend, with Amerigroup (AGP) leading the sector higher after agreeing to be acquired by WellPoint (WLP) for $4.9 billion.
In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Monday. Japan's Nikkei 225 Index fell by 1.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.9 percent.
The major European markets also moved to the downside over the course of the trading day. While the U.K.'s FTSE 100 Index slid by 0.6 percent, the German DAX Index and the French CAC 40 Index both ended the day down by 0.4 percent.
In the bond market, treasuries have moved modestly higher, extending last Friday's strong upward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.1 basis points at 1.513 percent.
by RTT Staff Writer
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