Stocks Move Mostly Lower Amid Uncertainty About The Fed - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower over the course of the trading day on Monday after initially showing a lack of direction. Uncertainty ahead of this week's Federal Reserve meeting is weighing on the markets.

The major averages have recently climbed off their worst levels of the day but currently remain stuck in the red. The Dow is down 57.90 points or 0.4 percent at 15,500.93, the Nasdaq is down 16.23 points or 0.5 percent at 3,596.94 and the S&P 500 is down 7.51 points or 0.4 percent at 1,684.14.

The moderate weakness that has emerged on Wall Street comes as traders are looking ahead to some key events later this week.

Traders are particularly focused on the outcome of the Federal Reserve's two-day monetary policy meeting that begins on Tuesday.

The Fed is not widely expected to announce plans to taper its asset purchase program when it releases its statement on Wednesday, but traders will be looking for any signals regarding the September meeting.

Along with the Fed meeting, traders will also be keeping a close eye on the monthly jobs report as well as the initial report on second quarter GDP.

A report from the National Association of Realtors showing a modest drop in pending home sales has also generated some negative sentiment.

NAR said its pending home sales index edged down 0.4 percent to 110.9 in June from a six-year high of 111.3 in May. Economists had been expecting the index to drop by about 1.4 percent.

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.

Despite the pullback by the broader markets shares of Elan (ELN) are seeing significant strength after the drug maker agreed to be acquired by Perrigo (PRGO) for $8.6 billion in cash and stock.

Luxury retailer Saks (SKS) is also moving higher after agreeing to be acquired by Hudson's Bay in a $2.4 billion, all-cash deal.

Sector News

Biotechnology stocks are turning in some of the market's worst performances in mid-day trading, with the NYSE Arca Biotechnology Index down by 1.2 percent. With the loss, the index is pulling back further off the record highs it set earlier this month.

Within the biotech sector, Sequenom (SQNM) and Myriad Genetics (MYGN) are posting notable losses, falling by 3.4 percent and 3.5 percent, respectively.

Considerable weakness has also emerged among oil service stocks, as reflected by the 1.2 percent drop by the Philadelphia Oil Service Index. The loss extends a recent downward trend by the index, which is moving lower for the sixth consecutive session.

Natural gas, financial, and housing stocks are also seeing significant weakness on the day, moving lower along with most of the major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 3.3 percent, while Hong Kong's Hang Seng Index ended the day down by 0.5 percent.

Meanwhile, the major European markets saw modest strength on the day. While the French CAC 40 Index closed just above the unchanged line, the U.K.'s FTSE 100 Index and the German DAX Index edged up by 0.1 percent and 0.2 percent respectively.

In the bond market, treasuries have moved to the downside as traders look ahead to the Fed's monetary policy announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 2.578 percent.