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U.S. Stocks Nearly Flat After Seeing Initial Strength


After failing to sustain an initial move to the upside, stocks have given back some ground over the course of morning trading on Monday. The major averages have pulled back off their best levels after reaching new record intraday highs.

Currently, the major averages are just above the unchanged line, up by less than a tenth of a percent each. The Dow is up 9.11 points at 27,341.14, the Nasdaq is up 3.08 points at 8,247.22 and the S&P 500 is up 0.16 points at 3,013.93.

The initial strength on Wall Street partly reflected a positive reaction to earnings news from Citigroup (C), with the financial giant reporting second quarter results that beat analyst estimates on both the top and bottom lines.

Buying interest waned shortly after the start of trading, however, as traders seem reluctant to make more significant moves ahead of the release of quarterly results from a slew of other big-name companies.

Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan (JPM), Kraft Heinz (KHC), IBM (IBM), Microsoft (MSFT), and America Express (AXP) are among the companies due to report their results this week.

Closely watched reports on retail sales, industrial production, homebuilder confidence and housing starts are also likely to attract attention over the next few days.

On the U.S. economic front, the Federal Reserve Bank of New York released a report before the start of trading showing regional manufacturing activity rebounded modestly in the month of July.

The New York Fed said its general business conditions index climbed to 4.3 in July from a negative 8.6 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to a positive 2.0.

The bigger than expected rebound by the general business conditions index came after it recorded its first negative reading in over two years in the previous month.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Natural gas stocks are seeing considerable weakness, however, with the NYSE Arca Natural Gas Index sliding by 1.1 percent.

Banking stocks have also moved to the downside in morning trading, while some strength has emerged among biotechnology stocks.

Within the biotech sector, Galapagos (GLPG) is soaring after Gilead Sciences (GILD) agreed to invest $5.1 billion in the company as part of a 10-year global research and development collaboration.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index rose by 0.4 percent, while Australia's S&P/ASX 200 Index slid by 0.7 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has risen by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.5 percent.

In the bond market, treasuries have shown a slight uptick after moving modestly higher over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by nearly a basis point at 2.097 percent.

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