After moving modestly lower at the open on Monday, stocks have moved back to the upside in early trading. The major averages have bounced well off their lows for the young session, climbing back near the unchanged line.
While most of the major sectors are showing only modest moves, early weakness is visible among banking stocks, which are giving back some ground after Friday's rally. On the other hand, airline and computer hardware stocks are seeing early strength.
Traders have largely shrugged off a report from the Commerce Department showing that personal spending increased by 0.4 percent in July after coming in unchanged in June. The increase came in just above the expectations of economists, who had been expecting spending to increase by about 0.3 percent.
The report also showed that personal income rose by 0.2 percent in July after coming in unchanged in the previous month. Personal income had been expected to rise by 0.2 percent.
In corporate news, M&A action is heating up as Intel (INTC) announced earlier that it intends to buy Infineon Technologies' (IFX) wireless chip unit for about $1.4 billion in cash. The move comes after Intel recently negotiated an agreement to buy security software maker McAfee (MFE).
After months of speculation, Sanofi-Aventis (SNY) announced a bid to buy Genzyme (GENZ) in an all cash deal valued at $18.5 billion or $69 per share in cash. Genzyme rejected the offer, however, saying the bid "dramatically undervalues the company".
Electronic storage firm 3PAR Inc. (PAR) said that Hewlett-Packard's (HPQ) $2 billion or $30 per share offer was a "superior proposal," while Dell Inc (DELL) is mulling a response to HP's latest tender.
Overseas, the Bank of Japan held a special meeting earlier, announcing an extension of its monetary easing policy in an effort to prop up the sluggish economic recovery and fight the recent surge by the yen.
The major averages are currently posting modest losses, just below the unchanged line. The Dow is down 7.49 points or 0.1 percent at 10,143.16, the Nasdaq is down 0.38 points or less than 0.1 percent at 2,153.25 and the S&P 500 is down 0.44 points or less than 0.1 percent at 1,064.15.
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