U.S. financial markets drifted mostly lower in midday trading Monday, relinquishing small gains from earlier in the day. The crisis in Iraq and its impact on global oil prices weighed on the stock market.
KEEPING SCORE: The Standard & Poor's 500 index fell a point to 1,935 as of 12:37 p.m. Eastern Time. The Dow Jones industrial average fell 20 points, or 0.1 percent, to 16,755. The Nasdaq composite was flat at 4,310.
ACQUISITION PRESCRIPTION: Covidien soared 19.4 percent after the Ireland-based medical device manufacturer agreed to be bought by U.S. competitor Medtronic. The deal is the latest in a series of acquisitions by medical-device manufacturers. Covidien rose $13.89 to $85.90. Medtronic fell $1.67, or 2.7 percent, to $59.04.
ENERGY MARRIAGE: Williams Companies rose $9.16, or 19.4 percent, to $56.32 after announcing a deal to expand its stake in Access Midstream Partners.
THE QUOTE: "Companies are looking to redeploy cash, looking to hopefully ignite growth through acquisition, so we see some of that this morning," said Sean Lynch, managing director of global equity for Wells Fargo Private Bank.
ROSIER OUTLOOK: The National Association of Home Builders/Wells Fargo builder sentiment index rose to highest level since January. The latest report suggests homebuilders' confidence in the housing market is improving and lifted homebuilder stocks. LGI Homes led the pack, adding 54 cents, or 3.1 percent, to $18.18.
BOX-OFFICE BLUES: DreamWorks Animation fell $3.18, or 11.6 percent, to $24.17 after the debut of its film "How to Train Your Dragon 2" failed to take top honors at the North American box office over the weekend. "Dragon" opened in second place with $50 million in ticket sales domestically. It also landed the top spot overseas.
SUPREME BLOW: The U.S. Supreme Court rejected Argentina's appeal of judgments ordering it to pay more than $1.3 billion to hedge funds that hold some of the country's bonds. The high court also ruled that the bond holders could use American courts to force Argentina to reveal where it owns property around the world. The decisions sent Argentina's Merval stock index down 6.3 percent.
WAIT AND SEE: Traders watched developments in Iraq with an eye on the Obama administration's next move as Sunni militants extended their violent advance. Secretary of State John Kerry said Monday that the Obama administration is open to discussions with Iran over the crisis and is considering airstrikes to slow the insurgency.
OIL: The price of crude continued to climb as Iraq's widening insurgency raised concerns that exports from OPEC's No. 2 oil producer could be affected. Oil rose a penny cents to $106.93 a barrel. Oil has risen 4 percent this month.
SECTOR SPOTLIGHT: Five of the 10 sectors in the S&P 500 index fell, with financials posting the biggest decline.
BOND WATCH: In U.S. government bond trading, the yield on the 10-year note held steady at 2.60 percent.