(RTTNews) - After recovering from a moderate pullback at the outset of the session, stocks are showing a lack of direction in mid-afternoon on Tuesday, as traders await more significant economic catalysts forthcoming in the second half of the week.

Traders pulled capital out of the equity markets earlier, as profit taking largely overwhelmed positive news on factory orders and some isolated gains on the heels of two significant M & A announcements.

This morning, the Commerce Department reported that orders for manufactured goods increased by a little more than expected in the month of September, with the report also showing a notable increase in shipments.

On the M&A front, Berkshire Hathaway (BRKa) entered an agreement to acquire the shares of Burlington Northern Santa Fe (BNI) it does not already own for $100 per share, while Stanley Works (SWK) and Black & Decker (BDK) also announced a merger agreement.

The transactions resulted in some upbeat sentiment that M&A activity may be picking up, helping to limit the pullback.

In other news, Ford, Toyota and Nissan all reported a pick-up in October sales, despite the end of the cash for clunkers program, which contributed to the inflated September numbers.

Meanwhile, the Federal Open Market Committee has begun 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.

The major averages are currently posting modest losses, well off their worst levels of the day. The Dow is currently down 37.18 at 9,752.26, the Nasdaq is down 1.51 at 2,047.69 and the S&P 500 is down 0.06 at 1,042.82.

Dow Components

A majority of the Dow components are in negative territory in mid-afternoon trading, contributing to the modest loss being shown by the blue chip index.

Intel (INTC) is seeing one of the steepest declines in the Dow, posting a loss of 3.1 percent. With the pullback, the stock is on pace to end the day at its lowest closing price in two and a half months.

Merck (MRK) is also extending its recent weakness, falling by 1.6 percent. Shares of the drug giant are poised to end the session at their worst closing level in nearly two months.

Coca-Cola (KO), Verizon (VZ), Microsoft (MSFT) and General Electric (GE) are also retreating, while Alcoa (AA) is on the rise, climbing by 1.8 percent. Shares of the aluminum producer are attempting to continue the recovery from last week's one and a half month closing low.

Caterpillar (CAT), DuPont (DD) and Disney (DIS) are also moving higher, helping to limit the pullback by the blue chip index.

Sector News

Semiconductor stocks continue to see some of the day's worst performances, with the Philadelphia Semiconductor Index falling by 1.7 percent and setting a two and a half month intraday low earlier in the session.

The index is being dragged down by shares of Micron (MU) and SanDisk (SNDK), which came under after Wedbush Morgan downgraded the stocks and lowered their target prices.

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