Congress Questions Fed

The markets turned negative during the midday with the Dow losing 10 points to 8837 as Congress questioned the ability of the Federal Reserve to regulate financial companies and manage the stimulus package. Nasdaq dropped 11 points to 1897.

On the upside

The Food and Drug Administration and Incyte (Nasdaq: INCY) agreed on the goals of a late stage clinical trial for the myelofibrosis treatment INCB18424.

Deutsche Bank cited improving conditions in the containerboard industry for upgrading International Paper (NYSE: IP).

Although second quarter earnings for Merck & Co. (NYSE: MRK) dropped due to falling revenue, the results beat analyst expectations.

On the downside

Regions Financial (NYSE: RF) blamed hefty loan loss provisions for swinging to a wider than expected second quarter loss.

Continental Airlines (NYSE: CAL) widened second quarter losses as business travelers curtailed trips amidst the economic downturn and fears of the swine flu. The airliner announced the elimination of 1,700 jobs and a $5 increase in domestic checked bag fees.

Comerica (NYSE: CMA) swung to a second quarter loss as loan loss provisions climbed and the bank made preferred dividend payments to the government.

In the broad market, declining issues outpaced advancers by a margin of nearly 2 to 1 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks dropped 7 points to 519.