(RTTNews) - Stocks are experiencing a modest pullback in mid-morning trading on Tuesday, as profit taking has overshadowed strength in transportation stocks and upbeat data on factory goods orders. The major averages are all in negative territory, offsetting a portion of yesterday’s solid gains.

Orders for manufactured goods increased by a little more than expected in the month of September, according to a report released by the Commerce Department, with the report also showing a notable increase in shipments.

Factory orders increased by 0.9 percent in September following an unrevised 0.8 percent decrease in August. The increase in orders came in slightly above economist estimates for an increase of about 0.8 percent.

On the M&A front, Berkshire Hathaway (BRKa) entered an agreement to acquire the remaining shares of Burlington Northern Santa Fe (BNI) it does not already own for $100 per share.

The transaction is valued at approximately $44 billion and is the largest ever made by Warren Buffet’s firm. The news has substantially lifted the railroad sector, despite an overall downtrend present in the equity markets.

Further, power tool maker Stanley Works (SWK) and Black & Decker Corp. (BDK) said that they have entered into a merger agreement to create Stanley Black & Decker, an $8.4 billion global industrial leader, in an all-stock transaction valued at about $4.5 billion.

In other news, the Federal Open Market Committee begins its two-day rate setting meeting today and is scheduled to make an announcement regarding the near-term direction of monetary policy at 2:15 p.m. ET on Wednesday.

After its two-day meeting in September, the Federal Open Market Committee announced that it would maintain the target rate for the federal funds rate at 0 to 0.25%, saying it continued to believe that economic conditions warrant exceptionally low rates for an extended period.

The major averages have all seen some downside in recent trading, pulling back off of their recovery highs. The Dow is currently down 38.47 at 9,750.97, the Nasdaq is down 9.31 at 2,039.89 and the S&P 500 is down 4.52 at 1,038.36.

Sector News

Semiconductor stocks are turning in some of the morning’s worst performances, with the Philadelphia Semiconductor Index falling by 2.2 percent and setting a two and a half month intraday low.

The index is being dragged down by shares of Micron (MU) and SanDisk (SNDK), which are falling by 3.6 percent and 4.6 percent, respectively. Micron has set a three-month low, while SanDisk has slipped to a one and a half month low. The losses come after analysts at Wedbush Morgan downgraded the stocks and lowered their target prices.

Pharmaceutical, retail and banking stocks are also mobbing lower, while railroad stocks are surging following the news of the Burlington Northern Santa Fe acquisition. The Dow Jones Railroads Index has surged up by 10.8 percent, bouncing off of Friday’s three-month closing low.

Airline, trucking, gold and biotechnology stocks are also on the rise, helping to moderate the day’s losses.

Stocks Driven By Analyst Comments

American Commercial Lines Inc. (ACLI) is moving lower in mid-morning trading after being downgraded by Stifel Nicolaus to Hold from Buy. The stock is down by 2.8 percent, setting a two-month intraday low.

Noble Energy, Inc. (NBL) is also declining following a downgrade by Argus from Buy to Hold. Shares are currently down by 1 percent, falling to their lowest intraday price in a month.

On the other hand, Anadys Pharmaceuticals Inc. (ANDS) is on the rise after being upgraded by Piper Jaffray from Neutral to Overweight. The stock has jumped by 7.3 percent, bouncing off of Monday’s three-month closing low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed lower on Tuesday. Hong Kong’s Hang Seng Index lost 1.8 percent and India’s BSE 30 Index fell by 3.1 percent. The Japanese market was closed for a public holiday.

The major European markets are also moving notably lower. The U.K.’s FTSE 100 and the French CAC 40 Index are down by 1.2 percent and 1.1 percent, respectively, while the German DAX Index is falling by 0.9 percent.

In the bond markets, treasuries are little changed following the factory orders data. Subsequently, the yield on the benchmark ten-year note is unchanged at 3.422 percent.

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Posted in Categories: Economy, Eurozone, Japan, Releases, USA.

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