RTTNews - Stocks are showing a lack of conviction in mid-morning trading on Friday, as traders digest a largely mixed set of economic reports released earlier. The major averages have bounced in and out of positive territory and are currently holding onto thin gains.

Traders digested some encouraging results from the Reuters/University of Michigan survey on consumer sentiment for May. The revised reading came in at 68.7, higher than the previously reported reading of 67.9. The result was also higher than April's final level of 65.1. Analysts expected the survey to yield a reading of 68.0.

With the upward revision, the consumer sentiment index rose to its highest level in eight months, adding to recent signs of optimism among consumers.

On the other hand, activity in the Chicago-area manufacturing sector continued to contract in the month of May, according to a report released by the Institute for Supply Management - Chicago, with the pace of contraction unexpectedly accelerating compared to the previous month.

The ISM-Chicago said its index of activity in the sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists had been expecting the index to edge up to a reading of 42.0.

Earlier, trader optimism was bolstered by a report from the Commerce Department that showed economic activity in the first quarter contracted at a slightly slower than previously estimated pace. The report, however, also showed a downwardly revised pace of consumer spending growth in the quarter.

Specifically, the data said that gross domestic product fell 5.7 percent in the first quarter compared to the advance estimate of a 6.1 percent decrease. Economists had been expecting the pace of contraction to be revised to 5.5 percent.

On the corporate front, automaker General Motors (GM) plans to file for bankruptcy protection June 1st, according to reports. Most of the company's assets would be sold to a new company sponsored by the U.S. Treasury Department.

On the earnings front, Dell Inc. (DELL) released a first quarter earnings report that showed net income of $0.15 per share, compared $0.38 per share in the prior year period. The company said the quarterly earnings included expenses that weighed down the bottom line by $0.09 per share.

Wall Street analysts expected the company to report earnings of $0.23 per share. Shares of Dell are up in mid-morning trading, rising by 1.9 percent.

Software service provider Novell Inc. (NOVL) announced adjusted second quarter net income of $0.08 per share, compared to $0.06 per share in the same period last year. The adjusted results edged out analyst estimates for earnings of $0.06 per share.

Additionally, Marvell Technology (MRVL) reported a first quarter loss of $0.06 per share. On an adjusted basis, first quarter earnings came in at $0.05 per share compared to $0.24 per share in the year-ago quarter. The adjusted earnings came in line with analyst expectations.

The major averages are currently posting modest gains, well off their best levels of the day. The Dow is currently up 9.00 at 8,412.80, the Nasdaq is up 2.78 at 1,754.57 and the S&P 500 is up 2.16 at 908.99.

Sector News

Most of the major sector indices are posting at least mild gains in mid-morning trading, contributing to the uptick seen in the major averages on the day.

Resource stocks are extending their recent surge, with gold stocks jumping yet again. Subsequently, the Amex Gold Bugs Index is up by 4.6 percent, climbing to a fresh 10-month high. The move comes as the price of gold has soared by $14 to $975.50 per ounce in commodities trading.

Steel, oil and natural gas stocks are also showing notable strength on the day, drawing further on rising commodity prices. Transportation stocks are also turning in some of the day's best performances despite the rise in oil prices.

Meanwhile, the day's gains are being moderated by losses by defense and banking stocks, with the S&P Banks Index and the Philadelphia Defense Index falling by 1.1 percent and 1.5 percent, respectively.

Stocks Driven By Analyst Comments

Shares of Office Depot (ODP) are seeing notable upside after being upgraded to Overweight from Neutral by JP Morgan. The stock's price target was also moved up to $8 from $5. Shares of the office supply giant have climbed 8 percent on the day, reaching their best intraday level in well over seven months earlier in the session.

Mattress maker Sealy (ZZ) was lifted to a Hold from a Sell rating by Stifel Nicolaus, which cited the stock's drop to fair value and the firm's capitalization efforts for the upgrade. Shares of Sealy have risen on the news, advancing by 6.4 percent, taking back some of its recent losses.

On the other hand, Level 3 Communications (LVLT) is treading on the downside following a downgrade by UBS from Neutral to Sell. The stock is down by 10.3 percent on the day.

Other Markets

Stocks markets across the Asia-Pacific region turned in a strong performance on Friday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while China's Hang Seng climbed by 1.6 percent.

The major European markets are also posting moderate gains. The French CAC 40 Index and the German DAX Index are up by 0.7 percent and 0.4 percent, respectively, while the U.K.'s FTSE 100 Index is rising by 1.5 percent.

In the bond markets, treasuries are showing notable strength on the day. Subsequently, the yield on the benchmark ten-year note is down to 3.559 percent, a drop of 11.3 basis points on the day.

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