RTTNews - With a bigger than expected drop in durable goods orders generating some negative sentiment, stocks moved lower at the start of trading on Wednesday. The major averages all slipped into negative territory after ending the previous session mixed.
Before the start of trading, the Commerce Department released a report showing that durable goods orders fell by 2.5 percent in June following a downwardly revised 1.3 percent increase in May. Economists had expected orders to fall by a more modest 0.6 percent.
Excluding a 12.8 percent decrease in orders for transportation equipment, however, orders for durable goods actually rose 1.1 percent in June compared to a 0.8 percent increase in May. The increase surprised economists, who had expected ex-transportation orders to come in unchanged.
Oil service stocks are turning in some of the worst performances in early trading, with a notable decrease by the price of oil generating some selling pressure. Significant weakness has also emerged among steel, chemical, and transportation stocks.
On the other hand, some health insurance and healthcare provider stocks are bucking the downtrend. WellCare Health Plans (WCG) is currently up 17.1 percent after reporting much stronger than expected second quarter earnings growth.
In other earnings news, Time Warner (TWX) reported adjusted second quarter net income of $0.45 per share, compared to $0.47 per share in last year's second quarter. While the earnings beat analyst estimates, revenues of $6.81 billion fell short of the expected $6.97 billion.
Meanwhile, Sprint Nextel (S) reported a second-quarter net loss of $0.13 per share compared to a loss of $0.12 per share in the same quarter last year. The telecom company also said its revenue fell 10 percent to $8.14 billion amid a decrease in subscribers.
In other news, Yahoo! (YHOO) and Microsoft (MSFT) have signed an agreement whereby Microsoft would now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies' premium search advertisers.
The major averages have seen some further downside in the past few minutes, falling to new lows for the young session. The Dow is currently down 64.77 at 9,031.95, the Nasdaq is down 16.82 at 1,958.69 and the S&P 500 is down 9.09 at 970.53.
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