US STOCKS-Wall Street stocks mostly flat with sentiment weakened by Moody's downgrade

By Chibuike Oguh

NEW YORK, May 19 (Reuters) - U.S. stocks finished near the unchanged mark on Monday with market sentiment weakened by the downgrade of the federal government's perfect sovereign credit rating owing to its huge debt profile.

Moody's slashed the U.S. sovereign credit rating to "Aa1" from "Aaa" after markets closed on Friday, citing the government's $36 trillion outstanding debt and interest.

"It is to be understood that markets were going to have a little bit of reaction because the (Moody's) announcement was after markets closed," said Talley Leger, chief market strategist at The Wealth Consulting Group. "But my view is that the 'sell-America' trade is overdone."

Equities had rebounded from declines earlier in the session to finish near the unchanged mark.

According to preliminary data, the S&P 500 .SPX gained 5.22 points, or 0.10%, to end at 5,964.10 points, while the Nasdaq Composite .IXIC gained 4.36 points, or 0.02%, to 19,215.46. The Dow Jones Industrial Average .DJI rose 137.20 points, or 0.32%, to 42,791.94.

Benchmark 10-year Treasury yields gained on concerns that a U.S. tax bill will increase the debt load by more than previously expected. The yield on benchmark U.S. 10-year notes US10YT=RR rose 2.2 basis points to 4.461%.

President Donald Trump's sweeping tax-cut bill had won approval from a key congressional committee on Sunday.

TXNM Energy TXNM.N rose after the utility said it would be acquired by the infrastructure unit of Blackstone BX.N in an $11.5-billion deal.

Novavax NVAX.O shares jumped after the company secured a long-awaited U.S. regulatory approval for its COVID-19 vaccine.

Regeneron Pharmaceuticals REGN.O rose after it announced it will buy genomics firm 23andMe Holding for $256 million through a bankruptcy auction.