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Stocks continue lower in midday trading

By msnbc.com news services

Stocks traded near their session lows Monday, as costs for Italy’s and Spain’s governments to borrow rose, signaling that the euro zone still has much work to do to handle its debt issues.

Approaching 1:30 Eastern, the Dow Jones industrial average was off 0.76 percent. The S&P 500 was 1.09 lower. The Nasdaq had fallen 0.86 percent.

Italy managed to sell five-year bonds to investors and raise $4.1 billion on Monday. But the 6.29 percent interest rate was the highest since 1997. Spain’s rate moved above 6 percent.

The New York Times noted some cause for optimism though.

Jeffrey D. Saut, chief investment strategist at Raymond James in St. Petersburg, Fla., noted that for the 445 of the S.& P. 500 companies that had reported results through Thursday, profits were up 22 percent from a year earlier, while revenues were up almost 12 percent.

Selling on Wall Street is unlikely to go very far “because earnings are just too good,” he said. Assuming the United States does not dip into recession, “I think you’ll see people outside of the United States shoveling money into stocks in this country.”

Retailers are reporting quarterly earnings. Lowe's Cos. posted profits that were below Wall Street's estimates, pulled down by charges tied to store closings and unfinished projects. The home-improvement retailer's stock dropped on the news.

J.C. Penney Co.'s stock also fell after it reported a quarterly loss early Monday. The department store operator said its results were weighed down by restructuring costs and it lowered its earnings outlook for the rest of the year.

IBM was up nearly 1 percent after the investor Warren Buffett said his firm has been buying the company's stock this year. The purchases have given Berkshire Hathaway Inc. a stake of more than 5 percent in IBM. Berkshire will file a full quarterly update on its holdings Monday afternoon.

No major economic reports are due out Monday.

CNBC's Michelle Caruso-Cabrera leads a discussion on Italy's and Spain's effect on U.S. markets.

Previously: Wall Street opens lower amid earnings, euro news