12-Jul-11 13:05 ET Dow -0.45 at 12505.31, Nasdaq -9.93 at 2791.77, S&P +0.28 at 1319.77

Stocks have been chopping along all session. The lackluster action comes as participants continue to grapple with concerns about the precarious financial conditions of countries in the eurozone’s periphery.

Overseas markets slumped overnight. Their weakness was largely owed to a lack of progress by the European Union in restoring confidence in the financial systems of Italy and its ilk. Europe’s bourses were able to improve their positions as trade progressed, but they were not able to fully overcome contagion concerns. That resulted in another round of losses.

Asia’s major averages also succumbed to aggressive selling. Hong Kong’s Hang Seng suffered the worst with its 3% drop. Japan’s Nikkei tumbled more than 1%. The country’s central bank reminded the world that the global economic recovery remains challenging with its decision to cut its GDP forecast.

Although weakness abroad permeated early premarket trade, negativity diminished with the arrival of the open. Stocks have since spent the session chopping along the neutral line.

Financials have been a source of broad market support, though. The sector’s 0.7% gain comes after it slumped in the prior session. They may lack market weight, but utilities are also up a relatively strong 0.7%.

Tech has lagged all session. The sector’s 0.5% decline is largely owed to pronounced selling pressure against semiconductor plays. Weakness in that space has the Philadelphia Semiconductor Index wrestling with a loss of more than 3%.

Only a handful of corporate announcements have been made since the prior session’s close. Among them, though, is the latest quarterly report from Alcoa (AA 15.89, -0.02). The company’s earnings results came short of the consensus call, but the stock has managed to remain near the neutral line.

Data on the day featured news that the trade deficit ballooned to about $50 billion during May. It had been broadly expected to total $44 billion.

Minutes from the latest FOMC meeting are coming up at 2:00 PM ET.

The dollar had attracted renewed buying interest this morning as traders further sold the euro. That helped the Dollar Index push up to a new four-month high. However, the euro has since rallied so that it now trails the greenback by only a fractional margin. As a result, the Dollar Index is back at the flat line.

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