Stocks are sharply lower at the session's half as the major
ratings agencies weigh in on the global debt situation. For its
part, Standard & Poor's raised concern over U.S. debt and cut
its outlook on the US government, saying that the US fiscal profile
may become "meaningfully weaker" absent policymaker action on the
budget deficit, The Wall Street Journal reports.
Also, Moody's Investors Service on Monday downgraded the ratings
of several Irish banks following its recent downgrade of Irish
government bonds, according to news reports. The rating agency cut
the long-term bank deposit ratings of Allied Irish Bank (
) and Bank of Ireland (
), EBS Building Society and Irish Life & Permanent by two
notches and that of ICS Building Society by one notch. Bank of
Ireland and ICS are now rated Ba1 and the other affected firms are
On the economic data front, the National Association of Home
Builders/Wells Fargo Housing Market Index fell by a point to 16 in
April, the level it's been at for five of the last six months.
Economists polled by MarketWatch had expected the gauge to stay at
A survey by the National Association for Business Economics
shows the U.S. economy continues its recovery, overcoming such
headwinds as higher oil prices and the disasters in Japan. The
survey found both higher sales and hiring as well as expectations
for greater economic growth. Improving profit margins were cited as
a factor behind the uptick in job creation. However, the NABE
survey also found signs of building inflationary pressures.
In company news:
Shares of Johnson & Johnson (
) are higher after Swiss firm Synthes Inc. confirmed it's in talks
with the health care products giant about a potential business
combination. The Wall Street Journal first reported the talks last
week and said the deal could be valued at roughly $20 billion.
Shares of Yahoo (
) are lower ahead of the company's first quarter earnings report
due after the stock market closes on Tuesday. Analysts polled by
FactSet see EPS of $0.16 on revenue of $1.05 billion, after
subtracting Yahoo's ad commissions.
) shares are down after Barron's reported over the weekend that the
chipmaker may rebound on its smartphone and tablet growth outlook
if the disruptions caused by Japan's earthquake and tsunami are
Principal Global Investors (PFG) eases after it says it will
acquire a majority stake in Finisterre Capital LLP, and Finisterre
Holdings Limited, (together Finisterre Capital). The transaction is
expected to close early in Q3. It estimates the acquisition will be
EPS neutral in 2011 and accretive in 2012.
Ford Motor Co. (F) said on Monday it is taking a test fleet of
electrified vehicles to China later this year, including the Fusion
hybrid. On the eve of the Shanghai auto show, the car maker
unveiled three electric vehicles: the new Focus all-electric
vehicle, the C-MAX Energi plug-in hybrid, and the Fusion
In earnings news:
--Citigroup (C) says it earned a dime per share in Q1, a penny
ahead of the Thomson Reuters mean estimate. Sales were $19.7
billion, below estimates for $20.5462 billion. Shares were down
--Amylin Pharmaceuticals (AMLN) shares are down after the
company reported a net loss excluding restructuring charges was
$34.5 million, or $0.24 per share versus $38.2 million, or $0.27
per share for the same period in 2010. According to a Thomson
Reuters poll, analysts had expected a loss per share of $0.23.
--Eli Lilly and Co. (LLY) is down after costs weighed on Q1
profits, but still managed to top the Street, ex-items, on a 6%
--Halliburton reports Q1 adjusted EPS of $0.61, topping the
Thomson Reuters mean analyst estimate for $0.58. Revenue increased
to $5.2 billion compared to $3.7 billion a year earlier. The Street
expected $4.9 billion.
Commodities are mixed. June gold contracts are up $9, or 0.58%,
to $1,494 an ounce while May crude oil contacts are up 2.37%, or
$2.6, at $107.01 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 2.37%
to $42.68 and the United States Natural Gas fund (UNG) is down
1.77%, to $10.82.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.43% at
$145.68. Market Vectors Gold Miners (GDX) is down 1.74% to $60.38.
iShares Silver Trust (SLV) is up 0.05% to $41.86.