RTTNews - After a volatile start to the session, stocks are lingering near the unchanged mark in mid-afternoon trading on Wednesday, despite the day's encouraging data on the economic front. The major averages have been unable to sustain any significant moves, experiencing another lackluster session.
Stocks showed a notable move to the upside early on following the release of a Commerce Department report on new home sales, which showed that sales increased by much more than expected in the month of July.
Traders also looked to a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July, although the growth was largely due to a substantial rebound in orders for transportation equipment.
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.
Some traders have 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.
The major averages are currently turning in a mixed performance, with the Dow just above the unchanged line. While the Dow is currently up 0.90 at 9,540.19, the Nasdaq is down 2.50 at 2,021.73 and the S&P 500 is down 1.06 at 1,026.94.
The Dow components are roughly split, contributing to the lack of direction being shown by the blue chip index.
Home Depot (HD) is turning in one of the Dow's best performances, posting a gain of 1.6 percent. At its high for the session, the stock was able to reach its best level in nearly eleven months. The home improvement retailer is benefiting from the day's positive housing data.
McDonald's (MCD) is also climbing, moving up by 1 percent. With the advance, shares of the fast food giant have reached a one-month intraday high.
Disney (DIS), Travelers (TRV), and Intel (INTC) are posting notable gains as well. While Disney and Travelers are poised to finish at fresh multi-month highs, Intel remains stuck in a recent range.
On the other hand, 3M (MMM) and General Electric (GE) are sliding, pulling back by 1.5 percent and 1.1 percent, respectively. Despite the pullback, the stocks continue to trade within this month's range.
JP Morgan Chase (JPM), Caterpillar (CAT) and Merck (MRK) are also retreating, but the mild losses still have stocks hovering near their recent multi-month highs.
Gold and steel stocks are continuing to retreat by notable margins in mid-afternoon trading, with the NYSE Arca Gold Bugs Index and the NYSE Arca Steel Index sliding by 1.8 percent and 1.9 percent, respectively. The pullback by resource stocks comes amid a retreat in commodities prices.
Weakness is also visible among health insurance stocks, with the Morgan Stanley Healthcare Payor Index down by 1.1 percent on the day. The decline is dragging the index away from its best finishing level in nearly one year's time.
While transportation stocks are also moving lower, biotechnology stocks are continuing to excel. The NYSE Arca Biotechnology Index is posting a 2.9 percent gain, extending its rally for the sixth straight session.
Airline and housing stocks are also seeing substantial moves to the upside, with the NYSE Arca Airline Index and the Philadelphia Housing Sector Index rising by 1.4 percent and 1.5 percent, respectively. The airline index has risen to its highest intraday level in seven and a half months, while the housing index has jumped to its best intraday level in nearly eleven months.
In Focus: Economic Data
As mentioned above, data from the Commerce Department 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. With the increase, new home sales rose to their highest level since September of 2008.
Economists had been expecting sales to edge up to 390,000 from the 384,000 originally reported for the previous month.
New home sales remain down 13.4 percent compared to the same month a year ago, although they have moved well off the record low set in January.
A separate report from the Commerce Department 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 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, treasuries are seeing choppy movement amid a light trading day in the broader markets. The yield on the benchmark ten-year note is trading at 3.455 percent, essentially unchanged on the day.
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