Manufacturing Activity Drops, Markets Open Lower

Congress brokered a deal to reduce the nation's deficit and raise the debt limit but the markets opened lower with the Dow falling 43 points to 12,100 as expansion of manufacturing activity dropped in July. Nasdaq lost 8 points to 2747.

On the upside

Communications and technology services provider Windstream will pay approximately $891 million in stock to acquire local exchange carrier Paetec Holding (Nasdaq: PAET).

Texas offered a $300,000 incentive for Office Depot (NYSE: ODP) to move its inside sales organization to Williamson County.

Shares of Sify Technologies (Nasdaq: SIFY) continued to rise after reporting lower first quarter losses on Friday.

On the downside

Morgan Keegan analyst Robert Mains downgraded Sun Healthcare (Nasdaq: SUNH) and Skilled Healthcare Group (NYSE: SKH) after the federal government announced on Friday an 11.1% cut in Medicare reimbursement rates to skilled nursing facilities.

Teva Pharmaceuticals (Nasdaq: TEVA) reported that its relapsing-remitting multiple sclerosis treatment Iaquinimod failed a Phase III clinical trial.

Shares of Alcatel-Lucent (NYSE: ALU) continued falling after reporting second quarter revenue that fell short of analyst expectations last week.

In the broad market, advancing issues outpaced advancers by a margin of more than 5 to 4 on both the NYSE and on Nasdaq. The Russell 2000 which tracks small cap stocks eased a fraction to 796.