RTTNews - Stocks finished Wednesday's session little changed, with the day's trading marred by choppy movement despite largely positive news on the economic front. The major averages closed only slightly higher after turning in another lackluster trading session.
Some traders remained on the sidelines ahead of the Thursday's weekly jobless claims report, which is expected to show a modest decrease in first-time claims for unemployment benefits.
Some of the day's early upside came on the heels of data on new home sales, which increased by much more than expected in the month of July, according to a report released by the Commerce Department.
The report showed that new home sales surged up by 9.6 percent to an annual rate of 433,000 in July from the revised June rate of 395,000. Economists had been expecting sales to edge up to 390,000 from the 384,000 originally reported for the previous month.
Some positive sentiment was also generated by a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July, with the growth largely due to a substantial rebound in orders for transportation equipment.
The report showed that new orders for durable goods jumped 4.9 percent in July following a revised 1.3 percent decrease in June. Economists had expected orders to increase by 3.2 percent compared to the 2.2 percent decrease that had been reported for the previous month.
Excluding an 18.4 percent increase in orders for transportation equipment, durable goods orders increased by a much more modest 0.8 percent in July compared to a 2.5 percent increase in June. The increase came in below economist estimates of 1.0 percent growth.
In other news, Atlanta Federal Reserve Bank President Dennis Lockhart said earlier today that although he believes the worst of the economic downturn has passed, the economic recovery will be slow and will contribute to a protracted period of high unemployment.
The major averages showed a slight upward move going into the close, ending the day just above the unchanged line. The Dow closed up by 4.23 points at 9,543.52, the Nasdaq gained 0.20 points to finish at 2024.43 and the S&P 500 rose by 0.12 to 1,028.12.
Biotechnology stocks saw outstanding gains on the day, despite the lackluster finish by the major averages. The NYSE Arca Biotechnology Index posted a gain of 3.1 percent for the day, extending its rally for the sixth straight session and closing at a new historic high.
Myriad Genetics (MYGN) helped to lead the biotech sector higher after reporting better than expected fourth quarter earnings. Shares of Myriad Genetics closed up 19.4 percent, at their best closing level in nearly two months.
Electronic storage stocks also moved higher on the day, with the NYSE Arca Disk Drive Index moving up by 1.4 percent. The advance helped the index to finish the day at an eleven-month closing high.
The index was propelled higher by the performance of Hutchinson Technology (HTCH), which surged up by 6.8 percent. With the upward move, the stock was able to close at its best price in nine and a half months.
Housing, airline, computer hardware and networking stocks also rose, while railroad stocks led the way lower in the transportation sector. The Dow Jones Railroads Index fell by 1.6 percent, backing further off of Friday's nine-month closing high.
Gold and steel stocks also pulled back on the day, as the price of resources fell in commodities trading on the NYMEX.
Intel (INTC) led the gainers in the Dow, posting a gain of 1.7 percent on the day. Despite the strong upward move, shares of the tech giant remained stuck in a recent trading range.
Exxon Mobil (XOM) also rose on the day, climbing by 1 percent. The day's advance lifted the stock to its best closing price in a month.
American Express (AXP) and McDonald's (MCD) also moved notably higher, posting comparable gains. American Express closed at an eleven month high, while McDonald's finished at a one-month high.
While Home Depot (HD), Coca-Cola (KO), AT&T (T) also moved to the upside, 3M (MMM) and General Electric (GE) saw some of the steepest losses in the blue chip index. 3M fell by 1.7 percent and General Electric slid by 1.3 percent, although they remained stuck in recent ranges.
Caterpillar (CAT) and Boeing (BA) also retreated, but the mild losses kept the stocks hovering near their recent multi-month highs.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Wednesday. Japan's benchmark Nikkei 225 Index rose by 1.4 percent, while China's Shanghai Composite Index closed up 1.8 percent.
Meanwhile, the major European markets closed moderately lower. The French CAC 40 Index slid by 0.3 percent, while the German DAX Index and the U.K.'s FTSE 100 Index fell by 0.7 percent and 0.6 percent, respectively.
In the bond markets, the benchmark ten-year note lingered near the unchanged mark for the majority of the day, although it saw a modest uptick in late-session trading. Subsequently, the yield on the note, which moves opposite of its price, closed at 3.438 percent, posting a loss of 1.2 basis points on the day.
Thursday, the Commerce Department will release its preliminary second quarter GDP report, with economists expecting the revised reading to show that the U.S. economy contracted at a 1.4 percent rate for the quarter. The report will be released at 8:30 a.m. ET.
Traders will also look to the Labor Department's weekly jobs report for the week ended August 22nd. Economists expect initial claims to come in at 565,000 after last week's report showed claims at 576,000. The report is scheduled for release at 8:30 a.m. ET.
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