RTTNews - Following a modest upward move at the open, stocks swung between gains and losses over the course of the trading session on Wednesday, ending the day little changed. The major averages finished mixed after posting steep losses in the previous session.

The lack of direction that was seen over the course of the trading day came as traders were reluctant to make any significant moves ahead of the start of the earnings season.

Shortly after the closing bell, Alcoa (AA) reported an adjusted second quarter loss of $256 million or $0.26 per share, while Wall Street expected the company to report a loss of $0.37 per share. The firm also said its quarterly revenues were $4.2 billion, edging out analyst estimates of $3.93 billion.

The release of quarterly results from Alcoa is seen as the unofficial start of the earnings season, as the aluminum producer is typically the first Dow component to reports its results.

During the day, traders also digested earnings from Ruby Tuesday (RT), Pepsi Bottling Group (PBG) and Family Dollar (FDO) on the day.

Some of the day's selling pressure was mitigated by the results of the Treasury Department's $19.0 billion offering of ten-year notes.

The sale drew a high-yield of 3.365 percent while attracting very strong demand, with the bid-to-cover ratio coming in at 3.28, the highest on record. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The major averages closed on opposite sides of the unchanged mark by slim margins, with the S&P 500 closing modestly lower despite a late-session rally. The Dow closed up by 14.81 points or 0.2 percent at 8,178.41 and the Nasdaq rose by 1 point or 0.1 percent to 1,747.17, while the S&P 500 fell 1.47 points or 0.2 percent to 879.56.

Sector News

While the major averages showed a notable move to the upside going into the close, significant weakness remained visible in a number of the major sectors.

Metal stocks saw some of the day's worst performances, extending their recent losing streak.
Gold stocks fell by steep margins, with the NYSE Arca Gold Bugs Index dropping by 4.4 percent.

The retreat by gold stocks came amid a sharp drop by the price of the precious metal, with gold for August delivery closing down $19.80 at $909.30 an ounce.

Banking and health insurance stocks are also moved sharply to the downside, with the Kbw Bank Index and the Morgan Stanley Healthcare Payor Index dropping by 2.1 percent and 2.8 percent, respectively. While the healthcare index offset some of yesterday's strong gain, the banking index continued its pullback, moving to its worst closing level in two months.

While telecommunications, networking, and brokerage stocks also saw weak outings, retail, pharmaceutical stocks and oil service stocks posted notable gains.

The S&P Retail Index closed by 2 percent, helped by shares of Tractor Supply (TSCO), which closed up by 10.8 percent. With the move, the shares of Tractor Supply closed at their best level in over nine months.

Further, the NYSE Arca Pharmaceutical Index rose by 1.5 percent on the day, while the Philadelphia Oil Service Index climbed 1.2 percent.

While the pharmaceutical index remained stuck in a range, the oil service index was able to bounce off of its worst closing level in over two months, posted in the previous session.

Dow Components

The modest gain posted by the Dow was partly due to upward moves by Merck (MRK) and Johnson & Johnson (JNJ) which both rose by 1.5 percent. With the upward move, the stocks further offset recent losses but remained in their recent trading ranges.

Boeing (BA) and Home Depot (HD) also moved higher, rising by comparable margins, moving off of yesterday's two and three-month closing lows, respectively. Also on the upside, Procter & Gamble (PG) climbed by 1.4 percent, setting a one-month closing high.

Meanwhile, shares of Bank of America (BAC) came under pressure, dropping by 2.5 percent on the day. The day's pullback dragged the stock to its lowest closing price in one month's time.

Communications giants Verizon (VZ) and AT&T (T) also saw considerable weakness, retreating by 1.8 percent and 1.6 percent, respectively. The stocks both finished at their lowest closing levels in over three months.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's session lower. Japan's benchmark Nikkei 225 Index closed down by 2.4 percent, while Hong Kong's Hang Seng Index dipped by 0.8 percent on the day.

The major European markets also ended the day in the red. The French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 1.3 percent and 1.1 percent, respectively, while the German DAX Index closed down by 0.6 percent.

In the bond markets, treasuries surged following the results of the day's ten-year note auction. Subsequently, the yield on the benchmark ten-year note closed at 3.289 percent, a loss of 17.1 basis points on the day.

Looking Ahead

On Thursday, traders will react to the results from Alcoa while also looking to employment data from the Labor Department for the week ended July 4th. Economists expect jobless claims for the week to come in at 600,000 compared to 614,000 in the previous week.

The labor market has been the focal point for some time as it continues to show steep losses, further deflating any optimism regarding an economic recovery. The data will be released at 8:30 a.m. ET.

Later on Thursday, focus may turn to the $11.0 billion auction of thirty-year bonds by the Treasury Department, with traders looking for continued cooling in interest rates. The results of the auction will be revealed at 1:00 p.m. ET.

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