RTTNews - After seeing some volatility shortly after the opening bell, stocks are posting modest gains in mid-morning trading on Friday amid mixed reaction to the day's quarterly GDP report. The major averages are all in positive territory, looking to extend their recent gains.

The U.S. economy continued to shrink in the second quarter, according to new government statistics released Friday, although the pace of contraction slowed by more than economists had been expecting.

The U.S. Commerce Department revealed that Gross Domestic Product, a closely watched measure of broad economic performance, fell at a pace of 1 percent for the second quarter. Economists had expected GDP to fall at a 1.5 percent rate.

Some pessimism was generated by the personal consumption figure in the report, which showed a decrease of 1.2 percent, significantly more than economists had been expecting. This followed a 0.6 percent increase in the first quarter.

Traders also looked to the results of the Institute of Supply Management-Chicago's business survey for July, which came in slightly higher than expected at 43.4. Economists expected the business barometer index to come in at 43 after rising by 5 points to 39.9 in June.

On the earnings front, Chevron (CVX) reported net income of $0.87 per share for the second quarter compared to $2.90 per share in the second quarter last year. The results came in short of Wall Street expectations of $0.95 per share, as revenues plunged by 71 percent.

Walt Disney (DIS) reported adjusted third quarter income of $0.52 per share, compared to $0.62 per share in the prior year quarter. Revenues for the quarter fell by 7 percent to $8.60 billion from $9.24 billion posted in the same period last year. Wall Street analysts expected the company to earn $0.51 per share on revenues of $8.83 billion for the third quarter.

Monster Worldwide (MWW) revealed adjusted second-quarter net income of $0.03 per share, compared to net income of $0.40 per share in the prior year quarter. The firm beat analyst forecasts for earnings of $0.01 per share for the quarter. The firm reported adjusted revenues of $224 million, falling short of the $225 million estimated by analysts.

The major averages have moved to the upside in recent trading, although they remain off the highs set early on. The Dow is currently up 48.74 at 9,203.20, the Nasdaq is up 8.59 at 1,992.89 and the S&P 500 is up 3.34 at 990.09.

Sector News

The major sectors are moving mostly higher, contributing to the strength visible in the broader markets.

Gold and defense stocks are turning in strong performances, with the NYSE Arca Gold Bugs Index and the Philadelphia Defense Sector rising by 1.9 percent and 1.3 percent, respectively. While the gold index remains stuck in a recent range, the defense sector has reached its best intraday level in roughly six weeks.

Housing stocks are also posting notable gains, as reflected by the 1.8 percent gain being shown by the Philadelphia Housing Sector Index. With the gain, the index has been lifted to its best level in nearly two months.

While steel, trucking and software stocks are also moving higher, considerable losses have emerged among electronic storage stocks. The NYSE Arca Disk Drive Index is down by 2.7 percent, falling away from its best closing level in nearly ten months set on Thursday.

Stocks Driven By Analyst Comments

Shares of Choice Hotels (CHH) are gaining in mid-morning trading after the firm was upgraded by JP Morgan Chase to Neutral from Underweight. The stock is up by 5 percent, climbing to its best intraday price in well over two months.

Office Max (OMX) is also moving higher by a notable margin following an upgrade at Citigroup, which raised its rating on the stock to Buy from Hold. Shares of the office supplies retailer are gaining by 14.7 percent, climbing to their best intraday level in roughly two months.

On the other hand, Tesoro (TSO) is sliding after being downgraded by Natixis Bleichroeder to Hold from Buy. The stock has slipped by 3 percent, although it remains stuck in a recent range, lingering near a one month closing high set earlier this week.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished largely on the upside on Friday, with Hong Kong's Hang Seng Index and Japan's benchmark Nikkei 225 Index posting gains of 1.7 percent and 1.9 percent, respectively.

Meanwhile, the major European markets are moving lower, with the French CAC 40 Index and the German DAX Index down by 0.2 percent and 0.6 percent, respectively, while the U.K.'s FTSE 100 Index is declining by 0.3 percent.

In the bond markets, treasuries are seeing notable gains following the day's GDP data. Subsequently, the yield on the note, which moves opposite of its price, is trading at 3.565 percent, posting a loss of 7.6 basis points.

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