Stocks continue to see modest weakness in mid-day trading on Monday, although selling pressure has waned from earlier in the session. Profit taking has contributed to the pullback by the markets following recent strength.
The major averages have climbed well off their lows for the session but currently remain in negative territory. The Dow is down 14.43 points or 0.1 percent at 13,260.77, the Nasdaq is down 6.04 points or 0.2 percent at 3,070.55 and the S&P 500 is down 2.46 points or 0.2 percent at 1,415.70.
The modest weakness on Wall Street comes as some traders have cashed in on the recent gains, which lifted the major averages to their highs levels in over three months last Friday.
Disappointing quarterly results from Lowe's (LOW) have also generated some negative sentiment, with the home improvement retailer falling by 6.3 percent on the day.
Lowe's reported second quarter earnings of $0.64 per share on sales of $14.3 billion, while analysts had expected earnings of $0.70 per share on sales of $14.5 billion. The company also lowered its full-year earnings guidance.
Trading activity has remained relatively subdued, however, with most traders staying on the sidelines amid a relatively light day on both the economic and corporate news fronts.
Nonetheless, shares of Coventry Health Care (CVH) have moved sharply higher after the health insurer agreed to be acquired by rival Aetna (AET) in a transaction valued at $7.3 billion, including the assumption of Coventry debt. Coventry has jumped by 19 percent on the news.
Under the terms of the agreement, Coventry stockholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, or $42.08 per share based on Aetna's closing on Friday.
While most of the major sectors are showing relatively modest moves, housing stocks have come under pressure following the news from Lowe's. The Philadelphia Housing Sector Index is down by 1.7 percent, pulling back off the nearly four-year closing high set last Friday.
KB Home (KBH), Lennar (LEN), and PulteGroup (PHM) are turning in some of the housing sector's worst performances on the day.
Networking stocks are also seeing significant weakness in mid-day trading, with the NYSE Arca Networking Index down by 1 percent. Telecom, semiconductor, and software stocks are also posting notable losses.
Meanwhile, airline stocks have moved sharply higher over the course of the trading day, driving the NYSE Arca Airline Index up by 2.7 percent. With the gain, the index has reached a one-month high.
The strength that has emerged among airline stocks comes as some major airlines have joined in on an airfare increase initiated by Southwest Airlines (LUV) last Friday.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index crept up by 0.1 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.
Meanwhile, the major European markets all moved modestly lower on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index and the German DAX Index dipped by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries have moved modestly higher over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 1.802 percent.
by RTT Staff Writer
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