While buying interest has waned from earlier in the session, stocks remain mostly positive in mid-afternoon trading on Wednesday. The strength in the markets comes as traders react to some mixed corporate news and some comments from Treasury Secretary Geithner.
On the corporate front, Morgan Stanley (MS) reported a much wider than expected first quarter loss of $0.57 per share and revealed that it has slashed its quarterly dividend by 80 percent to $0.05 a share.
Meanwhile, food giant McDonald's (MCD) reported first quarter net income of $0.87 per share compared to $0.81 per share in the same quarter of last year, while analysts expected the company to report earnings of $0.82 per share.
In other news, speaking to the Economics Club of Washington earlier today, Secretary Geithner hinted that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on.
He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth.
We may have to adapt our policies further as conditions evolve, and we need to make sure we provide a scale of support that matches the intensity of the challenge, Geithner said.
On the economic front, U.S. home prices rose 0.7 percent on a seasonally-adjusted basis from January to February, according to the Federal Housing Finance Agency's monthly House Price Index. January's previously reported 1.7 percent increase was revised to a 1.0 percent increase.
For the 12 months ended in February, U.S. prices fell 6.5 percent. The price index is also 9.5 percent below its April 2007 peak.
While the Dow has bounced back and forth across the unchanged line in afternoon trading, the blue chip index has recently shown a notable upward move and is currently up 38.55 at 8,008.11. The Nasdaq is up 26.96 at 1,670.81 and the S&P 500 is up 8.26 at 858.34.
A roughly mixed performance by the Dow components is contributing to the lack of direction that has been shown by the blue chip index over the course of the afternoon.
Nonetheless, construction equipment maker Caterpillar (CAT) is posting a strong 5.7 percent gain on the day after reaching its highest intraday level in nearly three months. Earlier in the day, JP Morgan upgraded its rating on Caterpillar to Overweight from Neutral.
Additionally, American Express (AXP) and General Electric (GE) are also posting strong gains, with shares of AmEx up 4.6 percent and shares of GE up 4.5 percent.
While Intel (INTC) AT&T (T), and JP Morgan (JPM) are also seeing considerable strength, drug giants Pfizer (PFE) and Merck (MRK) are posting notable losses. Shares of Pfizer are currently down 2.3 percent, while shares of Merck are down 1.9 percent.
Johnson & Johnson (JNJ), Exxon Mobil (XOM), and Procter & Gamble (PG) are also under pressure, limiting the upside currently being shown by the Dow.
Helping to keep the tech-heavy Nasdaq firmly in positive territory, semiconductor stocks are continuing to show considerable strength on the day. The Philadelphia Semiconductor Index is currently up 6.3 percent, climbing back towards a recent resistance level.
Within the semiconductor sector, Micron Technology (MU) is posting a significant gain, rising 9.1 percent. At its high for the day, Micron was at its best intraday level in over seven months.
Trucking, housing, and steel stocks are also among those showing noteworthy gains on the session. The Dow Jones Trucking Index is up 6.4 percent, while the Philadelphia Housing Index and the Amex Steel Index are posting gains of 3.8 percent and 3.7 percent, respectively.
Meanwhile, pharmaceutical stocks continue to post notable losses on the day, driving the Amex Pharmaceutical Index down 1.9 percent. With the loss, the index has fallen to its worst intraday level in over a month.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While notable strength was visible in South Korea, the markets in Hong Kong and mainland China experienced considerable weakness.
Meanwhile, the major European markets all ended the day firmly in positive territory. The U.K.'s FTSE 100 Index finished the session up 1.1 percent, while the French CAC 40 Index and the German DAX Index posted gains of 1.7 percent and 2.1 percent, respectively.
In the bond markets, treasuries remain in negative territory, although they have moved off their worst levels of the day. Subsequently, the yield on the benchmark 10-year note is up 4.5 basis points at 2.947 percent.
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