Stocks gave up a majority of their earlier gains and are turning in a lackluster performance in mid-afternoon trading on Monday after Jon Greenlee, associate director of the Fed's division of banking supervision and regulation revealed concerns over the state of the financial system.
Greenlee said the U.S. banking system is "far from robust," sparking a pullback in the financial sector. Separately, the Federal Reserve Governor Daniel Tarullo remarked that even though the economy has begun to show signs of life, the outlook on the magnitude of the recovery should be cautiously optimistic.
Earlier gains came on the heels of data from the Institute for Supply Management showing that manufacturing activity expanded for the third consecutive month in October amid a jump in production and employment.
The ISM said its index of activity in the manufacturing sector rose to 55.7 in October from 52.6 in September, with a reading above 50 indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 53.0.
Separately, the National Association Of Realtors reported its headline pending home sales index rose 6.1 percent to 110.1 in September from a reading of 103.8 in August. The increase in the index came as a surprise to economists, who had expected the index to edge down 0.1 percent.
The U.S. Commerce Department also revealed that construction spending rose 0.8 percent in September, following a 0.1 percent decline in August and a 1.2 percent slide in July.
The major averages are currently turning in a mixed performance, with the Nasdaq posting a modest loss. While the Nasdaq is currently down 6.81 at 2,038.30, the Dow is up 42.17 at 9,754.90 and the S&P 500 is up 2.50 at 1,038.69.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.