RTTNews - Following a strong open on Wednesday, stocks have pared most of their early gains and are now showing a lack of conviction. The major averages are on opposite sides of the unchanged line as buying interest waned shortly after the opening bell.
On the economic front, traders are digesting a report from the Commerce Department showing that the U.S. trade deficit for the month of April came in modestly wider than in March, as the value of exports fell by more than the value of imports.
The report showed that the trade deficit widened to $29.2 billion in April from a revised $28.5 billion in March. Economists had expected the deficit to widen to $29.0 billion from the $27.6 billion originally reported for the previous month.
Later in the day, trading is likely to be impacted by the Treasury Department's budget for May and the Federal Reserve's Beige Book, which compiles commentary on recent economic activity in the 12 Fed districts. The reports are set to be released at 2:00 p.m. ET.
Traders will also likely look to the results of the Treasury Department's monthly auction of benchmark ten-year notes this afternoon to evaluate their position in the bond market. The Treasury will sell $19.0 billion worth of the notes, which are set to mature May 15th, 2019. The results of the auction are scheduled to be released at 1:00 p.m. ET.
In other news, the Supreme Court has allowed the sale of Chrysler's assets to Italian automaker Fiat to move forward. In lifting a stay on the sale, the high court rejected a move by a group of plaintiffs, including three Indiana public pension organizations, to block the sale.
Both companies and the White House had warned that further delays by the Supreme Court could have led to Fiat's withdrawal from the deal.
Meanwhile, the House Oversight and Government Reform Committee said they've subpoenaed the Federal Reserve for documents, including e-mails to and from Fed Chairman Ben Bernanke, to explore the genesis of Bank of America's December purchase of Merrill Lynch.
On Thursday, the Committee will host Ken Lewis, former Chief Executive Officer of Bank of America, as part of a growing investigation into whether government officials pressured the bank to withhold details about the deal from investors despite ballooning losses at the brokerage firm.
The major indices are currently mixed, as traders are doing some profit taking in tech stocks, resulting in a loss by the tech-heavy Nasdaq. While the Nasdaq is down 9.63 at 1,850.50, the Dow is up 19.04 at 8,782.10 and the S&P 500 is up 0.51 at 942.94.
The major sectors are turning in a roughly mixed performance, leading the major averages to show a lack of consistent direction in mid-morning trading.
Steel stocks are on the rise, resulting in a 1.5 percent gain by the Amex Steel Index. With the move, the index is extending its upward climb after being slowed by a pullback a week ago, reaching its best intraday level in over eight months earlier in today's session.
Olympic Steel (ZEUS) is helping to lead the way higher, advancing 18.8 percent. The day's gain has lifted the stock to its best level in over seven months. Olympic has benefited from an upgrade by KeyBanc Capital Markets, which raised its rating on the stock to Buy from Hold.
Some strength has also emerged among oil, oil service, and natural gas stocks. The move comes as commodity prices have risen on the day, with crude oil adding to recent gains and moving above $71 a barrel in recent trading.
On the other hand, notable weakness has emerged among airline stocks, with the Amex Airline Index falling by 2.3 percent on the day. With the retreat, the index is extending its recent losses, continuing to offset the gains posted early last week.
Electronic storage and healthcare provider stocks have also come under pressure, with the Amex Disk Drive Index and the Morgan Stanley Healthcare Provider Index dropping by 2.1 percent and 1.5 percent, respectively.
Additionally, real estate, chemical, and biotechnology stocks have also come under pressure over the course of the trading day. Sequenom (SQNM) is helping to lead the biotech sector lower, falling 13.2 percent.
Stocks Driven By Analyst Comments
Shares of Dr. Reddy's Laboratories (RDY) are on the rise after the firm was upgraded by Citigroup from a Hold to a Buy rating. The stock is up by 4.4 percent after reaching its best intraday level in well over ten months earlier in the session.
Dr. Reddy's announced Tuesday that the U.S. Food and Drug Administration has granted approval of its new heartburn medicine Omeprazole Mg OTC.
Acadia Realty Trust (AKR) is also climbing following an upgrade by RBC Capital Markets from Sector Perform to Outperform. Shares of Acadia are up by 1 percent after reaching their highest intraday price in over five months earlier in the day.
Meanwhile, shares of Talbot's (TLB) are slipping after FBR Capital lowered its rating on the stock to Market Perform from Outperform. Shares of the specialty retailer are down by 2.2 percent, pulling back off of the seven-month high set in the previous session.
In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's session notably higher. Japan's benchmark Nikkei 225 Index rose by 2.1 percent, while Hong Kong's Hang Seng closed up by 4.0 percent.
The major European markets are also seeing strength. The U.K.'s FTSE 100 Index is up by 1.1 percent, while the French CAC 40 Index and the German DAX Index are rising by 1.0 percent and 1.5 percent, respectively.
In the bond markets, treasuries are showing notable weakness. Subsequently, the yield on the benchmark ten-year note is up to 3.9 percent, a climb of 4.2 basis points on the day.
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