RTTNews - Stocks remain unable to sustain any direction, seeing choppy trading in mid-afternoon trading on Tuesday. The major averages are currently all positive but have been swinging between gains and losses amid lingering concerns about corporate earnings and near-term economic prospects.

Earlier, a report released by the Commerce Department revealed that retail sales increased by a little more than expected in the month of June, although the sales growth was due in large part to higher gasoline prices. Excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell for the month.

In a separate report, the U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose by a significant margin in June after seeing only a mild increase in the previous month.

In an interview with RTT News, John Canally, an economist with LPL Financial discussed today's economic data, calling them another sign things stabilized in the second quarter.

However, in terms of the market, he says that green shoots story is old news now. Markets now want to see actual improvement in the economy. They want to see it's getting better. On that end, he says the day's reports kind of failed that test, but I think there are better times ahead.

Aside from the economic figures, traders are also digesting a slew of earnings, with Goldman Sachs (GS) firmly beating analyst estimates and Johnson & Johnson (JNJ) edging out forecasts.

The major indices have largely moved sideways in recent trading, extending their lackluster performance. The Dow is up by 13.52 to 8,345.20, the Nasdaq is up by 5.44 to 1,798.65 and the S&P 500 is up by 3.20 to 904.25.

Dow Components

The majority of the Dow components are seeing limited movement, contributing to the lack of direction seen in the blue chip index.

Leading the Dow lower are shares of Travelers (TRV) which are down by 2.4 percent. With the retreat, the stock has given back all of the gains posted in the previous session.

Further, shares of AT&T (T) are puling back, with a 1.7 percent loss visible in shares of the telecommunications giant. The day's decline has the stock is testing a four month closing low posted on Friday.

While Bank of America (BAC), Alcoa (AA) and American Express (AXP) are also seeing weakness, shares of Home Depot (HD) and Disney (DIS) are the leading gainers in the Dow, both climbing by 2 percent. Despite the upward move, the stocks remain stuck in a recent range.

Sector News

Gold and railroad stocks remain strong in mid-afternoon dealing, with the NYSE Arca Gold Bugs Index and the Dow Jones Railroads Index rising by 2.3 percent and 3.7 percent, respectively.

The price of gold futures is helping gold stocks, with the precious metal seeing a gain of $1.40 to $923.90 per ounce on the NYMEX. CSX Corp. (CSX) is boosting the railroad sector, showing a gain of 6.7 percent after reporting stronger than expected earnings for the second quarter.

Strength has emerged in airline stocks, as reflected by the 1.9 percent gain being posted by the NYSE Airline Index. With the advance, the index has climbed to its best intra-day level in well over one month.

While semiconductor and retail stocks are gaining, weakness is visible among health insurance and banking stocks. The Morgan Stanley Healthcare Payor Index is sliding by 2.1 percent, while the S&P Banks Index is down by 2 percent. Notably, the healthcare index is poised to finish at its worst level in nearly one month's time.

In Focus: Economic Data, Earnings News

As mentioned above, a report from the Commerce Department showed that retail sales rose 0.6 percent in June following an unrevised 0.5 percent increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4 percent.

However, excluding gas station and motor vehicle and parts sales, the headline retail sales figure showed a decrease 0.2 percent for the month.

Meanwhile, the U.S. Labor Department revealed that producer prices rose 1.8 percent in June. This followed a 0.2 percent increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5 percent.
The equity markets are also reacting to earnings from Goldman Sachs, which reported second-quarter earnings of $2.72 billion or $4.93 per share, compared to $2.05 billion or $4.58 per share in the same quarter of last year.

Excluding the impact of the TARP, earnings were $3.14 billion or $5.71 per common share for the second quarter of 2009. Wall Street expected the company to report earnings of $3.54 per share for the quarter.

Johnson & Johnson reported adjusted second quarter earnings of $4.26 billion, down from $4.42 billion in the year ago quarter. On a per share basis, earnings were $1.15, compared to $1.18 per share in the same period last year. Analysts forecast the firm to earn $1.11 per share.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Tuesday's session notably higher, with Japan's benchmark Nikkei 225 Index and Hong Kong's Hang Seng Index climbing by 2.3 percent and 3.7 percent, respectively.

The major European markets also moved to the upside, with the German DAX Index and the French CAC 40 Index finishing up by 1.3 percent and 1 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a gain of 0.9 percent on the day.

In the bond markets, treasuries closed near their worst levels of the day. Subsequently, the yield on the benchmark ten-year note finished at 3.447 percent, a gain of 10.1 basis points on the day.

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