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While the Institute for Supply Management released a report showing that activity in the service sector contracted for the ninth consecutive month in June, the pace of contraction slowed by even more than economists had been expecting.
The ISM said its index of activity in the service sector rose to 47.0 in June from 44.0 in May, although a reading below 50 indicates a contraction. Economists had been expecting the index to come in at 46.0.
On the corporate front, beleaguered automaker General Motors has been granted permission by a U.S. bankruptcy judge to sell most of its assets to a U.S Treasury-funded buyer.
Food and beverage giant PepsiCo Inc. (PEP | Quote | Chart | News | PowerRating), together with its bottling partner Pepsi Bottling Group Inc. (PBG | Quote | Chart | News | PowerRating), announced its plans to invest $1 billion in Russia over three years.
Meanwhile Bemis Company (BMS | Quote | Chart | News | PowerRating), a supplier of flexible packaging and pressure sensitive materials, said it would take over the Food Americas division of Alcan Packaging for $1.2 billion. Alcan is a business unit of Anglo-Australian mining giant Rio Tinto (RTP | Quote | Chart | News | PowerRating).
Regis (RGS | Quote | Chart | News | PowerRating) said its fourth-quarter revenues decreased 2.5 percent to $625 million from $641 million in the year-ago period. Total same-store sales for the quarter were down 4.0 percent. Wall Street analysts estimated revenues of $617.95 million for the quarter.
In other news, EMC (EMC | Quote | Chart | News | PowerRating) raised its all-cash offer to acquire Data Domain (DDUP | Quote | Chart | News | PowerRating) to $33.50 per share for a total enterprise value of about $2.1 billion. EMC is competing with NetApp (NTAP | Quote | Chart | News | PowerRating) to acquire Data Domain.
After a failed recovery attempt, the major averages have moved back to the downside in recent trading, falling to new lows for the session. The Dow is currently down 63.11 at 8,217.63, the Nasdaq is down 24.64 at 1,771.88 and the S&P 500 is down 9.23 at 887.19.
Sector News
Notable weakness has emerged among resource stocks, with gold, steel, and oil stocks seeing disappointing outings. The NYSE Arca Gold Bugs Index and the NYSE Arca Steel index have fallen by 4.7 percent and 5.5 percent, respectively.
Further, the NYSE Arca Oil Index has slipped by 3.6 percent on the day, falling to its worst intraday level in over two months. The move comes as commodity prices have taken a hit in early trading, with the price of oil plunging by $2.41 to $64.32 a barrel.
Housing, healthcare provider, software and semiconductor stocks are also sliding by notable margins, reflecting the day's broad weakness in the equity markets.
While the majority of sectors are in the red, tobacco stocks are bucking the downtrend. The NYSE Arca Tobacco Index has risen 1.1 percent, although it remains stuck in a recent range.
Stocks Driven By Analyst Comments
Opnext (OPXT | Quote | Chart | News | PowerRating) is moving to the downside in mid-morning trading after JP Morgan Chase downgraded the stock from Neutral to Underweight. The stock is down by 11.3 percent, falling to its worst intraday price in well over two months.
Shares of Citrix (CTXS | Quote | Chart | News | PowerRating) are also sliding following a downgrade at Oppenheimer, which lowered its rating on the stock to Perform from Outperform. The broker cited the stock's recent run-up as a reason for the downgrade. The stock is down by 2.9 percent, slipping to its worst intraday level in just over one month.
On the other hand, FormFactor (FORM | Quote | Chart | News | PowerRating) is on the rise after shares of the semiconductor specialist were upgraded at Oppenheimer to Outperform from Perform. The stock is up by 3.6 percent, extending its gains for a third straight session and moving further off of the one month closing low set in late June.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended Monday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by 1.4 percent, while Hong Kong's Hang Seng Index slipped by 1.2 percent.
The major European markets also continue to linger in the red, with the German DAX Index and French CAC 40 Index down by 1.1 percent and 1.4 percent, respectively. The U.K.'s FTSE 100 Index is also retreating, showing a decline of 0.8 percent.
In the bond markets, treasuries are seeing notable weakness despite the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.537 percent, a climb of 4.2 basis points on the day.
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