Stocks continue to see uncertainty in mid-afternoon trading on Tuesday, as a mixed bag of economic and corporate news, combined with continued fear fueled by the swine flu outbreak has caused stocks to be unable to hold a sustained move in either direction.
Despite a relatively minor increase in the number of confirmed cases of swine flu, the World Health Organization has raised the level of its influenza pandemic alert to phase 4. At the same time, the WHO does not recommend that countries close borders or restrict travel.
On the economic front, the Conference Board released a report earlier in the day showing that its consumer confidence index increased by much more than expected in April, reflecting a significant improvement in consumers' assessment of the short-term outlook.
The report showed that the consumer confidence index jumped to 39.2 in April from an upwardly revised 26.9 in March. Economists had expected the index to increase to 29.7 from the 26.0 originally reported for the previous month.
Separately, Standard and Poor's said U.S. home prices saw continued broad based declines in the month of February, although the annual rate of decline in prices did not set a new record for the first time in sixteen months.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 18.6 percent in February, a modest deceleration from the 19.0 percent drop in prices that was reported for January.
In other news, the Wall Street Journal reported that regulators are pushing Bank of America (BAC) and Citigroup (C) to raise more capital following early results of the government's stress test analysis, generating some concerns about the results of the tests.
The Journal said that the capital shortfall amounts to billions of dollars at Bank of America. The report specified that executives at both banks are objecting to the preliminary findings from the government's examination.
In recent trading, the major averages have shown a notable move to the upside, with the Dow and the S&P 500 reaching news highs for the session. The Dow is currently up 48.82 at 8,073.82, the Nasdaq is up 4.65 at 1,684.06 and the S&P 500 is up 4.39 at 861.90.
A mixed performance by the Dow components is contributing to the lack of direction currently being shown by the blue chip index.
Nonetheless, IBM (IBM) is turning in one of the Dow's best performances after the company's board raised its dividend by 10 percent and added $3 billion to its stock buyback program. IBM is currently up 2.4 percent, but it remains stuck in a range near a recent six-month high.
AT&T (T), Kraft (KFT), and JP Morgan (JPM), are also posting notable gains. AT&T is currently up 2.5 percent, while JP Morgan and Kraft are posting gains of 2.3 percent and 2.2 percent, respectively.
At the other end of the spectrum, General Motors (GM) is showing a significant decline after posting a standout gain on Monday. After ending the previous session up 20.7 percent, shares of GM are currently down 8.8 percent.
Bank of America and Citigroup are also under pressure following the Wall Street Journal report, with the banks falling 6.5 percent 4.9 percent, respectively.
As investors get more nervous about the potential for a swine flu pandemic, buying interest in biotechnology stocks has soared. In response, the Amex Biotechnology Index is up 2.6 percent.
Within the biotech sector, Vertex Pharmaceuticals (VRTX) is posting a gain of 8.2 percent, making it one of the best performers. With the advance, the stock has climbed to its highest level in two months.
Health insurance, healthcare provider, and real estate stocks are also posting considerable gains on the day, with the Morgan Stanley Healthcare Payor and Healthcare Provider Indices up 4.1 percent and 3.4 percent, respectively, while the Morgan Stanley REIT Index is up 3.2 percent.
Meanwhile, gold, steel, and oil services stocks remain some of the worst performers of the session, reacting negatively to the weakness in commodities prices.
In overseas trading, stock markets across the Asia-Pacific region closed considerably lower on Tuesday amid continued concerns about the economic impact of the swine flu outbreak. Japan's benchmark Nikkei 225 Index showed a notable decline, closing down 2.7 percent.
The major European averages also showed notable weakness, although they closed off their intraday lows. The U.K.'s FTSE 100 Index and the French CAC 40 Index both fell 1.7 percent, while the German DAX Index closed down 1.9 percent.
In the bond market, treasuries are seeing considerable weakness, although they have moved off their lows for the session in recent trading. Subsequently, the yield on the benchmark 10-year note is up 7.5 basis points at 2.996 percent after reaching a high of 3.02 percent.
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