Mid-Day Update: Stocks Down at Session's Half; Investors Watch Europe Cautiously as Italy Bond Yields Rise

Stocks are down in mid-day trading after a two-session surge at the end of last week capped swirling uncertainties in Europe's debt drama. Investor concern remains focused on Europe as Italy's borrowing costs - which had declined toward the end of last week - rose again. Also in view: a panoply of economic data points - including the Empire state index and retail sales data - are due tomorrow. No major economic news is due today.

Across the Atlantic, Italy sold $4.1 billion of five-year notes with a 6.29% yield - the highest since June 1997, according to Bloomberg. Also. German Chancellor Angela Merkel, speaking at her political party's annual conference, called for closer political ties and stricter budget rules, the report also said.

The resignation of Berlusconi followed by the approval, by the new parliament, of additional austerity measures reassured investors that the Eurozone would work swiftly to get its massive debt load under control. European stocks opened higher, but swiftly drifted into negative territory. The appointment of new Italian PM Monti proved positive for the Asian markets.

In Asia, Japan's economy grew at 6% in the latest quarter. Exports from the country have surged as the economy recovers from the devastating earthquake earlier this year.

Stateside, the U.S. Supreme Court said it will hear challenges to the President's landmark helath care law. Specifically, challenges focus on the law's mandate for individuals to have health insurance or pay a fine as lower courts have both upheld and rejected the law. A ruling could come as early as this summer - just ahead of the presidential election.

Health insurers are higher, with UNH, up 0.28%; CI down 0.02%; HUM up 0.2% and AET up 1.4%. Drugmakers are lower with PFE off 0.9%; MRK off 0.8%; J&J down 0.2% and GSK down 0.7%.

In mid-day company news:

Shares of Chevron ( CVX ) are down while Reuters reports an official with Brazil's energy regulator said drilling from the U.S. oil major led to an oil spill next the its Frade project. Chevron is estimating the spill at between 400 to 650 barrels from the oil sheen, the report said.

Moody's ( MCO ) shares are down as the company said it has acquired a majority stake in Copal Partners, a company that provides outsourced research and analytical services to institutional customers. Copal will be integrated into MCO's Analytics Professional Services unit and will continue to be managed by its existing senior management team.

Clorox ( CLX ) is up after 13D filings show that activist investor Carl Icahn has lowered his stake in the company to 6.89% after being as high as 15.38% earlier this year.

Disney ( DIS ) shares are down as the company announced that its wholly owned subsidiary, Disney Online, has acquired Babble Media, an online parenting platform. The acquisition will become part of the Disney Interactive Media Group's Moms and Family portfolio.

Cray ( CRAY ) is sharply higher after it affirmed its 2011 earnings outlook and said it expected to be profitable for 2012 on revenue of $340 million to $360 million. Gross-profit margin for the year should approximate 35% of sales, the company said. The outlook reflects Cray's closing of a $188 million deal with the University of Illinois to provide a supercomputer for a National Science Foundation project, the company said.

Bank of America (BAC) announced it agreed to sell approximately 10.4 billion common shares of China Construction Bank Corporation (CCB) through private transactions with a group of investors. The sales are expected to generate an after-tax gain of approximately $1.8 billion.

Commodities are down as December gold contracts are down 1.32% to $1,783 an ounce while December crude oil contacts are down 0.93% to $98.69 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 0.97% to $37.84 and the United States Natural Gas fund (UNG) is down 3.05%, to $7.96.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.47% to $173.13. Market Vectors Gold Miners (GDX) is down 1.44% to $61.41. iShares Silver Trust (SLV) is down 1.22% to $33.33.

Here's where markets stand at mid-day:

-NYSE down 75.08 (-1.1%) to 7,494.05

-DJIA down 73.26 (-0.6%) to 12,080.42

-S&P 500 down 11.23 (-0.61%) to 1,252.93

-Nasdaq down 16.27 (-0.59%) to 2,663.09


Nikkei up 1.05%.

Hang Seng up 1.94%.

Shanghai Composite up 1.92%.

FTSE-100 down 0.20%.

DAX-30 down 1.02%.


NYSE Energy down 1.4% at 12,527.53

NYSE Financial down 1.6% at 4,063.72

NYSE Health Care down 0.8% at 6,819.92

NYSE Arca Tech 100 down 0.3% at 1,122.95


(+) BXG (+41.7) signs merger, reports Q3


(-) NVDA (-1.1%) continues evening gain that followed earnings beat.

(-) DIS (-2.2%) continues evening gain that followed earnings beat.

(-) KW (-2.6%) prices shares.

(-) JCP (-1.3%) after reporting Q3 adjusted earnings of $0.11 per share, vs. $0.19 per share last year

(-) SORL (-2.7%) after reporting Q3 results that fell behind results from the previous Q3

(-) GLGL (-23.4%) widens Q3 loss

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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