RTTNews - Stocks have turned negative in early afternoon trading on Friday, with the tech sector weakening after holding onto gains for most of the morning. The major averages are all in the red by moderate margins, although the sell-off is being limited by another low volume outing.
On the economic front, Reuters and the University of Michigan released their final report on consumer sentiment in the month of August on Friday, showing that their consumer sentiment index was upwardly revised by much more than economists had been expecting.
Also this morning, the Commerce Department released a report showing that personal income was nearly unchanged in July, although the data also showed a modest increase in personal spending that came in line with economist estimates.
Early buying interest in the tech sector was sparked by news from Intel (INTC), which said that it now expects revenue for the third quarter to be approximately $9.0 billion, which exceeds the $8.55 billion forecast by analysts.
The major averages have shown a notable move to the downside in the past few minutes, falling to new lows for the session. The Dow is currently down 76.94 at 9,503.69, the Nasdaq is down 9.13 at 2,018.60 and the S&P 500 is down 7.80 at 1,203.18.
Tobacco stocks are seeing continued weakness in early afternoon trading, with the NYSE Arca Tobacco Index sliding by 1.2 percent. The index is falling for the fourth straight session, backing further away from Monday's ten and a half month closing high.
Further, health insurance stocks are also seeing notable losses, with the Morgan Stanley Healthcare Payor Index falling by 2.5 percent. Cigna (CI) and UnitedHealth (UNH) are turning in two of the sector's worst performances.
Most of the other major sectors have also moved to the downside over the course of the trading day, with trucking, defense, pharmaceutical, and healthcare provider stocks posting notable losses.
Meanwhile, semiconductor stocks continue to see some strength, although they have moved well off their best levels of the day. The Philadelphia Semiconductor Index is currently up 1.7 percent after rising as much as 4.1 percent in early trading to reach a nearly eleven-month intraday high.
Stocks In The News
Despite the pullback by the broader markets, Aruba Networks (ARUN) is seeing continued strength after the company reported adjusted fourth quarter earnings of $0.03 per share, a penny above analyst estimates. Total revenues of $53.326 million also exceeded analyst expectations. The stock is surging up by 14.9 percent, reaching its best intraday level in nearly nineteen months.
Tiffany & Co. (TIF) is also moving higher after reporting second-quarter earnings of $0.46 per share, which exceeded the expected $0.33 per share. Sales also topped estimates, coming in at $612.5 million compared to the consensus of $602.14 million. The stock has jumped by 8.3 percent and reached an eleven month intraday high.
On the other hand, shares of Novell Inc. (NOVL) are down 6.4 percent following news that the firm's revenues fell just short of analyst estimates, although the company reported earnings versus a year-ago loss. At its low for the session, the stock was at a roughly one-month low.
In Focus: Economic Data, Earnings
As mentioned above, the Commerce Department revealed that personal income edged up by less than 0.1 percent in July following a revised decrease of 1.1 percent in June, while economists had expected income to increase by 0.1 percent compared to the 1.3 percent drop originally reported for the previous month.
At the same time, the Commerce Department said that personal spending rose 0.2 percent in July compared to an upwardly revised 0.6 percent increase in the previous month. The modest increase came in line with economist estimates.
With income unchanged and spending rising, personal saving as a percentage of disposable personal income fell to 4.2 percent in July compared with 4.5 percent in June.
Also on the economic front, Reuters and the University of Michigan said their consumer sentiment index reading for August came in at 65.7 compared to the mid-month reading of 63.2, although it remained below the final July reading of 66.0. Economists had been expecting a more modest upward revision to a reading of 64.0.
Traders also reacted to earnings news from Dell (DELL), which reported second-quarter net income of $0.24 per share and revenues of $12.76 billion. Excluding $0.04 per share in expenses for organizational effectiveness actions, Dell earned $0.28 per share. Wall Street analysts expected the company to earn $0.23 per share on $12.59 billion in revenues.
Also on the tech front, Marvell Technology Group (MRVL) reported adjusted second quarter net income of $0.18 per share and sales of $640.6 million. The figures beat consensus estimates that called for earnings of $0.14 per share on $619.83 million in sales.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher to close out the week. Japan's benchmark Nikkei 225 Index rose by 0.6 percent.
The major European markets also closed with notable gains, with the French CAC 40 Index and the U.K.'s FTSE 100 Index finishing up by 1.2 percent and 1.1 percent, respectively, while the German DAX Index rose by 0.8 percent.
In the bond markets, treasuries have turned positive amid the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.442 percent, posting a loss of 2.0 basis points.
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