RTTNews - After sliding at the opening bell, stocks are showing a lack of conviction in mid-morning trading on Friday after traders seem to have panned the day's economic data. The major averages are on opposite sides of the unchanged line, extending their recent string of lackluster performances amid anemic volume.
Consumer sentiment in the month of July has deteriorated by much more than anticipated, according to a report released by Reuters and the University of Michigan, with the decrease likely due in part to concerns about the labor market.
The report showed that the preliminary reading on the consumer sentiment index for July came in at 64.6 compared the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0.
Earlier, traders largely shrugged off data from the Commerce Department showing that the U.S. trade deficit narrowed to $26.0 billion in May from $29.2 billion in April. The data surprised economists, who had expected the deficit to widen to $30.0 billion for the month.
A separate report from the Labor Department revealed that import prices rose 3.2 percent in June while export prices rose 1.1 percent. The jump in import prices was largely due to a substantial increase in the prices of petroleum imports.
Meanwhile, traders are watching Treasury Department Secretary Tim Geithner testify before a joint hearing of House Financial Services and Agriculture Committees regarding derivatives regulation this morning.
On the earnings front, Dow component Chevron (CVX) released its interim earnings update after the markets closed on Thursday, revealing a sharp drop in its U.S. refining margins for the second quarter. The firm also said that it expects its downstream results for the quarter to be significantly lower than in the previous quarter.
General Motors Corp. (GMGMQ.PK) CEO Fritz Henderson announced in a press conference this morning that the new General Motors Company is beginning its operations as a new entity.
The new GM is majority-owned by the U.S. government, which holds a 61 percent stake in the company. The remaining shares will be held by a United Auto Workers union healthcare trust, the governments of Canada and Ontario, and GM's former unsecured bondholders.
The major indices have seen choppy movement in recent trading, with the tech-heavy Nasdaq holding just above the unchanged mark. While the Nasdaq is currently up 3.83 at 1,756.38, the Dow is down 41.94 at 8,141.23 and the S&P 500 is down 2.81 at 879.87.
Resource stocks have resumed their downward move after yesterday's modest recovery, with oil, steel and natural gas stocks pulling back by notable margins.
The NYSE Arca Oil Index is down by 1.6 percent, poised to set a two-month closing low. The decline by oil stocks comes as the price of crude oil continues to decline, falling by $0.85 to $59.56 per barrel on the NYMEX.
Further, the NYSE Arca Steel Index and the NYSE Arca Natural Gas Index are down by 1.3 percent and 1 percent, respectively. The indices have offset some of yesterday's gains, lingering close to the roughly two-month closing lows set on Wednesday.
While banking and utility stocks are also retreating, strength is visible among technology stocks. Electronic storage are posting notable gains, as reflected by the 1.1 percent gain being shown by the NYSE Arca Disk Drive Index.
Semiconductor stocks are also seeing some strength after trending lower in recent sessions. Specifically, shares of Novellus (NVLS) are up by 1 percent after being upgraded to a Buy rating at Needham.
Stocks Driven By Analyst Comments
Shares of Yahoo! (YHOO) are rising in mid-morning trading after being upgraded at Thomas Weisel from Underweight to Market Weight. The broker cited the firm's organizational changes, which are expected to streamline activity and competitiveness, as the reason for the ratings change. The stock is up by 3 percent, moving further off of a two-month closing low set on Wednesday.
Perkin Elmer (PKI) is also climbing following an upgrade by Deutsche Securities from Sell to Hold. The stock has risen by 5.3 percent on the day, climbing away from its worst closing price in just over a month set in the previous session.
On the other hand, Walter Energy (WLT) is moving to the downside after Brean Murray downgraded the stock to Hold from Buy. Shares of the coal producer are down by 2.5 percent, backing further away from an eight-month closing high set late last week.
In overseas trading, stock markets across the Asia-Pacific region ended Friday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by less than a tenth of a percent, while Hong Kong's Hang Seng Index slipped by 0.5 percent on the day.
The major European markets are also moving to the downside, with the German DAX Index and the French CAC 40 Index down by 0.1 percent and 0.5 percent, respectively. The U.K.'s FTSE 100 Index is also falling, posting a loss of 0.2 percent.
In the bond markets, treasuries are posting notable gains amid renewed economic concerns and bargain hunting after yesterday's selling spree. Subsequently, the benchmark ten-year note is trading at 3.331 percent, a loss of 8.2 basis points on the day.
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