RTTNews - On the heels of a notable rally in the previous session, stocks are showing lack of direction in morning trading on Wednesday amid mixed data from the housing sector. The major averages are turning in a mixed performance, with the tech-heavy Nasdaq posting a strong gain.
A report from the National Association of Realtors showed that existing home sales in the month of April increased by slightly more than economists had been expecting, although the report also showed a notable increase in housing inventories.
The data showed that existing home sales rose 2.9 percent to an annual rate of 4.68 million units in April from a downwardly revised rate of 4.55 million units in March. Economists had expected sales to rise to a 4.66 million unit rate from the 4.57 million unit rate originally reported for the previous month.
While the pace of existing home sales increased compared to the previous month, total housing inventories at the end of April represented a 10.2-month supply compared with a 9.6-month supply in March.
In corporate news, Bank of America (BAC) said that it raised almost $26 billion in its capital plan since the stress test results were announced and is well on its way to reaching the $33.9 billion indicated Supervisory Capital Assessment Program or SCAP buffer set by the Federal Reserve.
The company announced last week that it raised $13.5 billion through issuing 1.25 billion shares in an at-the-market common stock offering. It has also sold part of its holdings in China Construction Bank, generating a capital gain.
Traders are also keeping an eye on auto icon General Motors (GM), which is on the cusp of entering bankruptcy. This morning, GM indicated that its bondholders have rejected the embattled automaker's debt-for-stock offer.
On the earnings front, AutoZone (AZO) reported third quarter net income $3.13 per share, beating Wall Street expectations of $2.89 per share. While AutoZone benefited from an increase in replacement-part sales as consumers held onto their cars longer, the company's stock is seeing some weakness in mid-morning trading, falling by 2.4 percent.
Separately, Staples (SPLS) reported adjusted first quarter earnings of $0.22 per share. The adjusted results edged out Wall Street analysts forecasts, which had called for the company to report earnings of $0.21 per share. Shares of the office supply giant are currently modestly lower percent.
In recent trading, the Nasdaq has pulled back off its high for the session, although it is currently holding onto a moderate gain. While the Nasdaq is up 8.37 at 1,758.80, the Dow is down 39.90 at 8,433.59 and the S&P 500 is down 1.69 at 908.64.
The major sectors are also turning in a mixed performance, contributing to the lack of conviction shown by the broader markets in mid-morning trading.
Some transportation stocks are under pressure, with the Amex Airline Index and the Dow Jones Railroads Index falling by 2 and 1.8 percent, respectively. With the pullback the indices are giving back gains posted in the previous session.
Weakness is also visible among resource stocks, which are being driven lower by slipping commodity futures on the NYMEX.
Meanwhile, semiconductor stocks are leading the day's gainers, as reflected by the 3.1 percent climb by the Philadelphia Semiconductor Index.
Additional strength has emerged among electronic storage stocks, with the Amex Disk Drive Index rising by 2 percent on the session. With the advance, the index has risen to its best intraday level in over seven months.
Bolstering the index are shares of SanDisk (SNDK), which are soaring by 15.8 percent on the day. The firm is being boosted by news that it hass extended a licensing agreement with Samsung for an additional seven years.
Steel, housing and healthcare stocks are also posting strong gains.
Stocks Driven By Analyst Comments
Citrix Systems (CTXS) is seeing some downside after being downgraded to Neutral from Overweight by JP Morgan Chase. The stock's rating was slashed on speculation that its recent run up came in part of rumors that it may be acquired by Cisco Systems (CSCO). Shares of Citrix are down by 2.8 percent, pulling back off of a 10-month high.
Big Lots (BIG) is also trading on the downside following a downgrade by JP Morgan Chase. The rating on the retailer's stock was cut to Neutral from Overweight, prompting some of the downward move. JP Morgan said that the company's forecasted revenues are already priced into the stock. Shares Big Lots are down by 6.5 percent on the day, giving back nearly all of their recent gains.
On the other hand, shares of Regions Financial (RF) are seeing notable strength following an upgrade by Deutsche Bank to a Buy rating. Deutsche Bank said the recent sell-off in the financial service stock is overdone. Shares of Regions Financial are up by 6.4 percent on the news, moving off of the 2-month closing low set in the previous session.
In overseas trading, stock markets across the Asia-Pacific region finished notably higher on Wednesday. Japan's benchmark Nikkei 225 Index rose 1.4 percent, while Hong Kong's Hang Seng Index jumped by 5.3 percent.
The major European markets are currently posting modest gains, with the U.K.'s FTSE 100 Index currently up 0.1 percent, while the French CAC 40 Index and the German DAX are up 0.6 percent and 0.3 percent, respectively.
In the bond markets, treasuries are showing considerable weakness on the day. Subsequently, the yield on the benchmark ten-year note is up to 3.56 percent, a jump of 6.7 basis points on the day.
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