RTTNews - Stocks finished on a mixed note after seeing choppy trading throughout Wednesday's trading session, with reaction to the latest earnings results limited by low volume. The major averages closed on opposite sides of the unchanged mark, largely unable to extend their recent run-up.
Earlier this morning, traders delved into quarterly results from a number of big-name companies, including Apple (AAPL), Yahoo! (YHOO), Pfizer (PFE) Boeing (BA), Morgan Stanley (MS), Wells Fargo (WFC), and PepsiCo (PEP).
The reports saw mixed reaction, however, as most firms met or beat estimates by cost cutting rather than through revenue growth.
In other news, Federal Reserve Chairman Ben Bernanke redelivered his address regarding monetary policy before the Senate Banking Committee while also fielding questions regarding the current and near-term economic outlook.
In his prepared remarks, Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
Questioning the Fed chief, Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, noted that while some signs of economic recovery have been seen on Wall Street, the benefits have yet to make it to Main Street.
Dodd added, We on this committee work for the American people. When can they expect the recovery that they have funded? When will working families see their rally, their pay raise, their jobs stabilized?
Bernanke conceded that unemployment is the most pressing issue facing the Fed, but he noted that there are steps that Congress could take to ease the situation, similar to the already-passed extension of unemployment benefits.
He said one serious concern was that the long-term unemployed might see their job skills atrophy, leaving them unqualified for work once the economy recovers. Extending job training programs might be one response Congress should consider, the Fed chief said.
The major averages moved sideways in late session dealing to cap off a lackluster trading day. While the Nasdaq eked out a gain of 10.18 points or 0.5 percent, finishing at 1,926.38, the Dow fell by 34.68 points or 0.4 percent to 8,881.26. Further, the S&P 500 slipped by 0.51 points or 0.1 percent to close at 954.07.
Despite the lackluster session, housing stocks posted significant gains on the day, with the Philadelphia Housing Sector Index closing up 3.3 percent. The index was able to finish at its best closing level in roughly six weeks, boosted by earnings from NVR (NVR), which firmly beat Wall Street estimates. NVR stock in turn closed at its best price in over nine months.
Strength in the tech sector helped the Nasdaq to post a modest gain, with upward moves visible among electronic storage and semiconductor stocks. Notably, the Philadelphia Semiconductor rose by 2.7 percent, finishing the session at its best closing level in over nine months.
Trucking and brokerage stocks also advanced on the day, although the gains were largely offset by weakness among oil service and airline stocks. The Philadelphia Oil Service Sector Index fell by 1.6 percent on the day, while the NYSE Arca Airline Index slid by 1.1 percent.
Oil service stocks were hurt by a decrease in the price of oil, which helped to drag the oil service index down from its best closing level in one month's time. Meanwhile, the airline index continued its move away from the more than five-month closing high it set on Monday.
The Dow was led lower by shares of Coca-Cola (KO) and Boeing (BA), which both fell by 2.4 percent. Coca-Cola continued to pull back off the nine-month closing high set on Monday, while Boeing backed off of the three-week closing high set in the previous session.
American Express (AXP) also posted a notable loss, falling by 2.1 percent and backing off of its best closing level in over nine months. Shares of Caterpillar (CAT) also weakened, sliding by 2 percent and retreating from their highest closing price in over two months.
Limiting the losses in the Dow were shares of Travelers (TRV) and General Electric (GE), which rose by 1.6 percent and 1.4 percent, respectively. Travelers was able to close at its best price in a month, while General Electric remained stuck in a recent range.
Shares of Intel (INTC), Home Depot (HD) and Kraft Foods (KFT) also rose, posting comparable gains on the day. Intel and Kraft extended their recent gains, setting fresh multi-month highs, while Home Depot largely offset its recent losses.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's benchmark Nikkei 225 Index posted a 0.7 percent gain, Hong Kong's Hang Seng Index fell by 1.3 percent.
Meanwhile, the major European markets all closed modestly higher, with the German DAX Index and the U.K.'s FTSE 100 Index finishing up by 0.5 percent and 0.3 percent, respectively, while the French CAC 40 Index lagged behind, posting a gain of only 0.1 percent.
In the bond markets, treasuries saw notable weakness following two days of gains. Subsequently, the yield on the benchmark ten-year note closed at 3.554 percent, posting a gain of 7.7 basis points on the day.
Traders will react to earnings from Qualcomm (QCOM), McDonald's (MCD), Wyeth (WYE) and AT&T (T) Thursday morning while also looking to two key economic reports.
The U.S. Labor Department will release its weekly jobless claims report, with economists expecting first time claims for the week ended July 18th to come in at 558,000 compared to 522,000 in the previous week. The report is set to be released at 8:30 a.m. ET.
Housing will also be in focus, with the National Association of Realtors scheduled to report figures on existing home sales for June shortly after the opening bell on Wall Street. The annual rate is expected to tick up to 4.83 million for the month after coming in at 4.77 million in May. The data is scheduled for release at 10:00 a.m. ET.
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