Wall Street fluctuated after Paulson's comments, but edged higher at midday.

On Monday morning Paulson said the Treasury Department is working to establish categories for homeowners in need of mortgage relief, and working to finalize a plan to provide support for those struggling under the weight of their home loans and move such borrowers to more affordable mortgage rates. Part of the plan includes freezing interest rates on thousands of loans in order to stem the tide of mortgage defaults.

Financial, housing, and mortgage-related stocks were firmly negative after Paulson's speech, with few bright spots.

The nation's largest home lender, Countrywide Financial, was down 35 cents, or 3.2%, to $10.47. Meanwhile, Freddie Mac and Fannie Mae slid on news of Paulson's plan, which called for additional government oversight of the government-sponsored mortgage giants. Shares of Freddie fell $1.72, or 4.9%, to $33.35, while Fannie was off $2.13, or 5.5%, to $36.29.

Home builders were mixed at midday. Beazer Homes USA fell 32 cents, or 3.8%, to $8.17, while Centex was 1.8% higher, rising 37 cents, to $21.23. Paulson's plan, which is a step toward offering a "get out of jail free" card to absolve the risky lending that sparked the subprime mortgage meltdown, could be both a blessing and a curse for the home builders.

The sector has been battered, with profits falling due to a glut of unsold homes on the market. While Paulson's plan may alleviate pressure on borrowers and allow them to keep their homes, it will likely not improve the near-term fate of home builders stuck with excess inventory.

Major financial players were in the red at midday, as well. Citigroup fell 30 cents, or 0.9%, to $33.00, as it continues its search for a new chief executive. Merrill Lynch shares fell $1.45, or 2.4%, to $58.49, as new chief John Thain officially took the helm Monday. Merrill, like Citi, ousted its former head after bad subprime bets resulted in massive third-quarter writedowns.

In the tech sector, Electronic Arts has new competition for the title of largest independent video game maker, as France's Vivendi will merge its gaming unit with Activision. The deal is just the latest in a run of good news for Activision, which has flourished of late thanks to strong sales of its game franchises, which include music simulation hit, Guitar Hero. (See: "Vivendi To Merge With Activision")

Shares of Activision climbed $3.47, or 25.62, to $15.7%, on news of the deal.

Oil prices continue to slip, as crude sank below $88 a barrel. Venezuelan President Hugo Chavez saw his constitutional referendum shot down Monday, which accelerated the commodity's recent slide. Chavez had proposed abolishing term limits, which would have extended his presidency indefinitely, assuming he continued to be re-elected; his term is due to run out in 2012.

Crude fell 96 cents, to $87.75.

The Dow Jones industrial average gained 14 points, or 0.1%, to 13,386, while the Nasdaq 500 added 3 points, or 0.1%, to 2,665. The broader Standard & Poor's 500 lagged however, down 2 points, or 0.2%, to 1,479.