After showing a strong upward move over the course of late morning and early afternoon trading, stocks have given back some ground since then. The major averages have moved well off their best levels of the day, although they remain in positive territory.
The pullback by the markets coincided with the release of the minutes of the March Federal Open Market Committee meeting, which said that committee members remain concerned about downside risks to an already weak outlook for economic activity.
The minutes showed that nearly of the meeting participants felt that economic conditions had deteriorated relative to their expectations at the time of the January meeting.
FOMC members felt that an apparent sharp fall in foreign economic activity was of particular note and widely agreed that exports are not likely to be a source of support for U.S. economic activity in the near term.
While the minutes also said that the committee members agreed that purchases of longer-term assets eligible for open market operations would be appropriate, they did not provide any additional details about the Fed's purchase plans.
In an interview with RTT News, Bill Stone, chief investment strategist at PNC Wealth Management said he is positive about the current market but stands by his belief that it is still a bear market for the moment.
Stone said, There are some risks out there.we don't know if an economic recovery is sustainable yet.
The upward move seen earlier in the session was partly due to news that Pulte Homes (PHM) has agreed to acquire rival Centex Corp. (CTX) in a stock-for-stock deal. The deal is valued at $1.3 billion and will create the nation's largest homebuilding company.
Under the terms of the agreement, Centex shareholders will receive 0.975 shares of Pulte common stock for each share of Centex they own. Based on Pulte's closing price on Tuesday, the deal values Centex at $10.50 per share, a 38 percent premium to Centex's closing price.
Meanwhile, Dow component Alcoa (AA) reported a $497 million net loss for the first quarter, hurt by the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminum prices.
The major averages have moved further off their highs in recent trading, with the Dow pulling back near the unchanged line. The Dow is currently up 11.55 at 7,801.11, the Nasdaq is up 18.89 at 1,580.50 and the S&P 500 is up 4.41 at 819.96.
While most of the Dow components were moving higher earlier in the afternoon, the components of the blue chip index are currently turning in a mixed performance.
A strong gain by shares of America Express (AXP) is helping to keep the Dow in positive territory, with the credit card giant currently up 3.7 percent. With the gain, AmEx has risen to its bets intraday level in almost two months.
Microsoft (MSFT), Home Depot (HD), and IBM (IBM) are also holding onto strong gains. Microsoft is up 2.9 percent, while Home Depot and IBM are showing gains of 2.3 percent and 1.9 percent, respectively.
At the other end of the spectrum, General Motors (GM) and Bank of America (BAC) have shown notable declines, contributing to the pullback by the Dow. GM is down 5 percent, while Bank of America is down 4.8 percent.
Kraft (KFT), United Technologies (UTX), and Citigroup (C) are also posting notable losses, falling more than 1 percent each.
As trading continues, some of the best performances of the session are coming out of the electronic storage sector, helping to push the Amex Disk Drive Index up 3 percent on the day.
Within the sector, NetApp, Inc. (NTAP) is one of the best performers, posting a gain of 9.2 percent so far. With the advance, the stock has broken some recent resistance and is at its highest level in just under two months.
Airline, retail, and natural gas stocks are also climbing during the session, with the Amex Airline Index and the S&P Retail Index up 3.5 percent and 3.7 percent, respectively, while the Amex Natural Gas Index posts a 2.3 percent gain.
Meanwhile, banking and healthcare provider stocks are leading the losers during Wednesday's session. The Kbw Bank Index is down 2.8 percent and the Morgan Stanley Healthcare Provider Index is posting a loss of 1.8 percent.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Wednesday following the weakness seen on Wall Street overnight. Japan's benchmark Nikkei 225 Index showed a notable decline, closing down 2.7 percent.
Meanwhile, the major European markets ultimately ended the session mixed. The French CAC 40 Index and the German DAX Index posted gains of 0.7 percent and 0.8 percent, respectively, while the U.K.'s FTSE 100 Index ended the trading session down 0.1 percent.
In the bond market, treasuries are showing a notable moving to the upside, climbing back near their highs of the day. Subsequently, the yield on the 10-year note is down 6.2 basis points at 2.847 percent.
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