RTTNews - Stocks are seeing some weakness in mid-afternoon trading on Friday, with the major averages lingering in negative territory after failing to sustain an early upward move. The Dow is currently poised to snap its eight-session winning streak.
While technology stocks helped to lead the way higher in early trading after Dell (DELL) reported better than expected quarterly results and Intel (INTC) raised its third quarter guidance, buying interest waned not long after the open.
Traders subsequently used the initial strength as an opportunity to do some profit taking following recent strength in the markets. With volume well below average, the major averages pulled back well off their highs for the session and into negative territory.
The markets have largely shrugged off the economic data released earlier in the day, including a report from Reuters and the University of Michigan showing a much bigger than expected upward revision to their consumer sentiment index for the month of August.
In recent trading, the Nasdaq briefly peeked back above the unchanged line, but it has slipped back into the red since then. The Nasdaq is currently down 0.77 at 2,026.96, while the Dow is down 48.52 at 9,532.11 and the S&P 500 is down 3.10 at 1,027.88.
A majority of the Dow components are trading in negative territory in mid-afternoon trading, contributing to the loss being shown by the blue chip index.
Merck (MRK) is turning in one of the Dow's worst performances, with the drug giant currently down 2 percent. With the loss, shares of Merck are pulling back further off the eleven-month closing high set on Tuesday.
After tending higher in recent sessions, shares of McDonald's (MCD) are also moving back to the downside. The fast food giant is currently down 1.3 percent after ending the previous session at a one-month closing high.
Boeing (BA), JP Morgan (JPM), and Caterpillar (CAT) are also posting notable losses, falling more than 1 percent each. The loss by Boeing comes after it surged up 8.4 percent on Thursday after saying that the first flight of its 787 Dreamliner is expected by the end of the year.
On the other hand, shares of Intel have shown a strong upward move after the company raised its third quarter guidance. The semiconductor giant is currently posting a 4.2 percent gain after reaching an eleven-month intraday high earlier in the session.
Citing stronger than expected demand for microprocessors and chipsets, Intel said it now expects to report third quarter revenue of $9.0 billion, plus or minus $200 million, compared to its previous forecast for revenue of $8.5 billion, plus or minus $400 million.
Alcoa (AA) and American Express (AXP) are also posting gains, although they are up by much more modest margins.
Health insurance stocks are seeing considerable weakness in mid-afternoon trading, dragging the Morgan Stanley Healthcare Payor Index down 2.4 percent. The index is moving further off the ten-month closing high it set on Tuesday.
Cigna (CI) is helping to lead the sector lower, with the managed care company currently down 3 percent after reaching a ten-month intraday high earlier in the session. Molina Healthcare (MOH) and WellPoint (WLP) are also posting notable losses.
Tobacco, trucking, and defense stocks have also moved lower over the course of the trading day, contributing to the downturn by the broader markets. Lorillard (LO) and Alliance One (AOI) are turning in two of the worst performances in the tobacco sector.
On the other hand, strength remains visible in the semiconductor sector, as reflected by the 2.1 percent gain being shown by the Philadelphia Semiconductor Index. While the index has moved well off its best level of the day, it remains poised to set an eleven-month closing high.
Gold stocks are also holding onto strong gains amid a notable increase by the price of the precious metal. With gold for December delivery closing up $11.50 at $958.80 an ounce, the NYSE Arca Gold Bugs Index is up 1.2 percent.
In Focus: Economic Data, Earnings
As mentioned above, Reuters and the University of Michigan said their final consumer sentiment index reading for August came in at 65.7 compared to the mid-month reading of 63.2. The revised index came in well below economist estimates of 64.0.
Separately, the Commerce Department said that personal income was nearly unchanged in July following a revised decrease of 1.1 percent in June. Economists had expected income to increase by 0.1 percent compared to the 1.3 percent drop originally reported for the previous month.
The report also showed 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.
In corporate news, Dell reported second quarter net income of $0.24 per share on revenues of $12.76 billion. Excluding expenses for organizational effectiveness actions, Dell earned $0.28 per share. 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 on 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 on Friday, with Japan's benchmark Nikkei 225 index closing up 0.6 percent. Hong Kong's Hang Seng Index bucked the uptrend, however, ending the day down 0.7 percent.
The major European markets also moved higher over the course of the trading day, with the French CAC 40 Index and the German DAX Index advancing 1.2 percent and 0.9 percent, respectively, while the U.K.'s FTSE 100 Index closed up 0.8 percent.
In the bond market, treasuries have turned higher over the course of the trading day, although the benchmark ten-year note is seeing only modest strength. The yield on the ten-year note is currently down less than a basis point at 3.46 percent.
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