Stocks Lackluster After Upbeat Pending Home Sales Data
Stocks are showing a lack of direction in mid-morning trading on Monday, even after the release of some better than expected news on the health of the housing market.
The major averages have all seen choppy movement in recent dealing, lingering near the flat line. TheDow is currently down 9.23 points or 0.1 percent at 10,820.45, the Nasdaq is down 9.86 points or 0.4 percent at 2,360.89 and the S&P 500 is down 2.51 points or 0.2 percent at 1,143.73.
With attractive affordability conditions inspiring some buyers to return to the housing market, the National Association of Realtors released a report showing that pending home sales increased by much more than expected in the month of August.
NAR said its pending home sales index rose by 4.3 percent in August following a revised 4.5 percent increase in July. The index had been expected to edge up by 1.0 percent compared to the 5.2 percent increase originally reported for the previous month.
At the same time, the Commerce Department released a separate report showing that factory orders fell by 0.5 percent in August following an upwardly revised 0.5 percent increase in July. Economists had expected orders to fall by 0.4 percent compared to the 0.1 percent increase originally reported for the previous month.
In corporate news, drug maker Sanofi-Aventis (SNY) has made a hostile, $18.5 billion bid for biotechnology giant Genzyme Corp. (GENZ). The offer comes in at $69 per share, a 38 percent premium over Genzyme's share price of $49.86 recorded on July 1st.
Gold stocks are among the worst performers in the early going, with the NYSE Arca Gold Bugs Index posting a 2 percent loss. The index is pulling back off a well over two-year closing high, as the price of gold is down by $1.80 to $1,316.00 an ounce.
Steel stocks are also seeing heavy selling, dragging the NYSE Arca Steel Index down by 1.4 percent off of Friday's five-month closing high.
Oil service, brokerage and health insurance stocks are also under pressure, while electronic storage and banking stocks are mitigating some of the pullback, seeing moderate gains.
Stocks Driven By Analyst Comments
Watson Pharmaceutical (WPI) is on the upside after analysts at Argus raised their rating on the stock from Hold to Buy. The stock has gained 0.6 percent, offsetting some recent downside, although it remains rangebound.
Penn National Gaming Inc. (PENN) is also trading higher after Merriman upgraded shares from Neutral to Buy. The stock is currently up by 2.5 percent and is on target for its best closing price in five months.
On the other hand, Microsoft (MSFT) is trading lower after a downgrade at Goldman Sachs to Neutral. Shares are down by 1.9 percent and on target for their lowest close in three weeks.
Overseas, stock markets in the Asia-Pacific region ended mostly higher on Monday. Hong Kong's Hang Seng Index gained 1.2 percent, while India's BSE 30 Index inched up by 0.2 percent. Meanwhile, Japan's benchmark Nikkei 225 Index slid by 0.3 percent.
The major European markets remain down by varied margins. The U.K.'s FTSE 100 Index is down by 0.2 percent, while the French CAC 40 Index and the German DAX Index are down by 0.4 percent and 0.8 percent, respectively.
In the bond markets, treasuries are modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.495 percent, posting a loss of 3.1 basis points.