After moving notably higher last week following the Federal Reserve's monetary policy announcement, stocks are seeing modest weakness in early trading on Monday. The major averages have slipped into the red, although selling pressure remains subdued.
Profit taking is contributing to the modest weakness on Wall Street, with some traders cashing in on the recent strength in the markets, which lifted the major averages to multi-year highs.
Last week's rally came on the heels of the Federal Reserve's announcement of its plans to launch a third round of quantitative easing as part of an effort to boost the sluggish economy.
The Fed said it would purchase additional agency mortgage-backed securities at a pace of $40 billion per month, adding that it will continue the purchases until the outlook for the labor market improves substantially.
Steel stocks continue to see notable weakness in late morning trading, with the NYSE Arca Steel Index down by 2.2 percent. Cliffs Natural Resources (CLF) has helped to lead sector lower after J.P. Morgan downgraded its rating on the stock to Neutral from Overweight.
Considerable weakness is also visible among housing stocks, as reflected by the 2 percent loss being posted by the Philadelphia Housing Sector Index. The loss by the index comes after it ended Friday's trading at a nearly five-year closing high.
Electronic storage, chemical, and financial stocks have also moved to the downside, moving lower along with most of the major sectors.
The major averages have moved roughly sideways in recent trading, stuck below the unchanged line. The Dow is down 17.58 points or 0.1 percent at 13,575.79, the Nasdaq is down 10.54 points or 0.3 percent at 3,176.59 and the S&P 500 is down 2.07 points or 0.1 percent at 1,463.70.
by RTT Staff Writer
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