RTTNews - Stocks remain uncertain in mid-afternoon trading on Friday as traders continue to look for direction on the heels of a batch of mixed economic reports. The major averages have bounced back and forth across the unchanged line throughout the session.
Earlier, traders digested consumer sentiment data for May from Reuters and the University of Michigan that showed its best results in eight months. Separately, the Commerce Department said that gross domestic product for the first quarter contracted, although at a slower rate.
Meanwhile, trader optimism was limited by manufacturing data from the Chicago area that continued to show a notable slowdown in the region.
In other news, embattled U.S. automaker General Motors (GM) confirmed that its UAW-represented employees have ratified the modifications to the GM-UAW 2007 national labor agreement. The amended agreement covers about 54,000 hourly employees located in 46 U.S. facilities.
Traders looked to a press conference from the UAW chief earlier this afternoon where he revealed details of the agreement, which will make it easier for GM to restructure as it enters bankruptcy.
The major averages are currently nearly unchanged, turning in a mixed performance. While the Nasdaq is down 1.64 at 1,750.15, the Dow is up 3.11 at 8,406.91 and the S&P 500 is up 0.97 at 907.80.
The Dow components are turning in a roughly mixed performance in mid-afternoon trading, helping to keep the blue chip index near the unchanged line.
Shares of Coca-Cola (KO) are turning in a strong performance, with the soft drink icon rising by 3.6 percent on the day. The day's gains have helped to position the stock to close at its best level in well over seven months.
Further, drug maker Merck (MRK) is turning in one of the day's best performances, with shares rising by 2.2 percent on the session. With the advance, the stock is poised to finish the day at its best price in nearly two months.
Additionally, shares of Pfizer (PFE), Caterpillar (CAT) and DuPont (DD) are also helping the Dow hold onto a modest gain on the session.
On the other hand, the day's gains are being limited by shares of General Motors, which is on the cusp on entering bankruptcy. Shares of the auto icon have dipped below $1 on the day, setting a fresh historic low.
Other Dow components on the decline include Intel (INTC), Hewlett Packard (HPQ) and JP Morgan Chase (JPM).
Despite the lackluster performance by the broader markets, notable strength has emerged among transportation stocks. Subsequently, the Dow Jones Railroads Index and the Dow Jones Trucking Index are up by 5.1 percent and 2.8 percent, respectively.
Gold, oil, steel, and natural gas stocks also posting strong gains amid rising commodity prices.
In addition, healthcare provider stocks have climbed significantly on the day, with the Morgan Stanley Healthcare Provider Index rising by 2.4 percent on the day. With the jump, the index is challenging its best intraday level in over seven months and is poised to close at its highest level in nearly eight months.
Meanwhile, significant weakness remains visible among defense stocks, as reflected by the 2 percent loss currently being shown by the Philadelphia Defense Sector Index. Esterline Technologies (ESL) is leading the sector lower, falling 8.3 percent.
In Focus: Economic Data, Earnings, General Motors, Obama Cyber Security Office
The Reuters/University of Michigan survey on consumer sentiment for May showed that its revised reading came in at 68.7, higher than the previously reported reading of 67.9. The result was also higher than April's final level of 65.1. Analysts expected the survey to yield a reading of 68.0.
With the upward revision, the consumer sentiment index rose to its highest level in eight months, adding to recent signs of optimism among consumers.
On the other hand, activity in the Chicago-area manufacturing sector continued to contract in the month of May, according to a report released by the Institute for Supply Management - Chicago, with the pace of contraction unexpectedly accelerating compared to the previous month.
The ISM-Chicago said its index of activity in the sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists had been expecting the index to edge up to a reading of 42.0.
Earlier, trader optimism was bolstered by a report from the Commerce Department that showed economic activity in the first quarter contracted at a slightly slower than previously estimated pace. The report, however, also showed a downwardly revised pace of consumer spending growth in the quarter.
Specifically, the data said that gross domestic product fell 5.7 percent in the first quarter compared to the advance estimate of a 6.1 percent decrease. Economists had been expecting the pace of contraction to be revised to 5.5 percent.
On the corporate front, automaker General Motors (GM) plans to file for bankruptcy protection June 1st, according to reports. Most of the company's assets would be sold to a new company sponsored by the U.S. Treasury Department.
Meanwhile, Dell Inc. (DELL) released a first quarter earnings report that showed net income of $0.15 per share, compared $0.38 per share in the prior year period. The company said the quarterly earnings included expenses that weighed down the bottom line by $0.09 per share. Wall Street analysts expected the company to report earnings of $0.23 per share.
Late this morning President Barack Obama announced the establishment of a cyber security office. The new office is expected to establish a system that will restrict outside access to government networks, which have been identified as an area of concern by the administration.
In addition to announcing the new office, President Obama stated his goal for a new education initiative aimed at increasing awareness of cyber security threats.
Stocks markets across the Asia-Pacific region turned in a strong performance on Friday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while Hong Kong's Hang Seng climbed by 1.6 percent.
The major European markets also ended the day moderately higher. The French CAC 40 Index and the German DAX Index closed up 0.4 percent and 0.2 percent, respectively, while the U.K.'s FTSE 100 Index rose 0.7 percent.
In the bond markets, treasuries are showing notable strength on the day. Subsequently, the yield on the benchmark ten-year note is down to 3.480 percent, a drop of 19.4 basis points on the day.
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