Stocks have moved to the downside in morning trading on Monday, with technology stocks leading the way lower after seeing considerable weakness late last week. Overall selling pressure has remained somewhat subdued.
Currently, the major averages are all in negative territory, although the tech-heavy Nasdaq is underperforming its counterparts.
The Nasdaq is down 63.47 points or 0.8 percent to 7,673.94, while the Dow is down 13.54 points or 0.1 percent at 25,437.52 and the S&P 500 is down 6.77 points or 0.2 percent at 2,812.05.
The weakness on Wall Street comes as tech stocks are seeing further downside following last week’s pullback, with Twitter (TWTR), Netflix (NFLX) and Facebook (FB) all moving sharply lower.
On the other hand, shares of Caterpillar (CAT) have moved to the upside after the heavy equipment maker reported better than expected second quarter earnings and raised its full-year guidance.
Caterpillar also said it expects recently imposed tariffs to impact operating profit in the second half by up to $200 million but said it intends to largely offset the impacts with price increases.
In U.S. economic news, the National Association of Realtors released a report showing a much bigger than expected rebound in pending home sales in the month of June.
NAR said its pending home sales index climbed by 0.9 percent to 106.9 in June after falling by 0.5 percent to 105.9 in May. Economists had expected pending home sales to inch up by 0.1 percent.
Despite the much bigger than expected increase, pending home sales in June were down by 2.5 percent compared to the same month a year ago, reflecting the sixth straight year-over-year decrease.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Extending the steep drop seen in the previous session, biotechnology stocks are turning in some of the market’s worst performances. The NYSE Arca Biotechnology Index is down by 1.1 percent after slumping by 1.9 percent last Friday.
On the other hand, energy stocks have shown a strong move to the upside amid a sharp increase by the price of crude oil. Crude for September delivery is jumping $1.35 to $70.04 a barrel amid concerns about looming sanctions on Iran.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index has surged up by 2.7 percent, the NYSE Arca Natural Gas Index has jumped by 1.7 percent and the NYSE Arca Oil Index has climbed by 1.3 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index fell by 0.3 percent.
The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index are down by 0.2 percent and 0.3 percent, respectively.
In the bond market, treasuries have pulled back after ending the previous session modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 2.977 percent.
by RTTNews Staff Writer
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