RTTNews - After a lower open, stocks have shown a lack of conviction in mid-morning trading on Thursday, as traders are digesting a slew of mixed earnings and economic reports. The major averages have been swinging between gains and losses throughout the morning.
Generating some pessimism earlier was the Federal Reserve Bank of Philadelphia's report showing that its index of manufacturing activity in the Mid-Atlantic region fell by more than economists had been expecting.
The Philly Fed said its index of current activity fell to a negative 7.5 in July from a negative 2.2 in June, with a negative reading indicating a contraction in the sector. The index had been expected to slip to a reading of negative 4.8.
In a separate report this morning, the Labor Department revealed that first time claims for unemployment benefits continued to decrease in the week ended July 11th, with initial jobless claims falling by more than economists had been expecting.
The report showed that jobless claims fell to 522,000 from the previous week's revised figure of 569,000. Economists had been expecting jobless claims to fall to about 530,000 from the 565,000 originally reported for the previous week.
However, analysts have pointed out that irregularities in the auto sector have continued to impact jobless claims, skewing the data artificially lower.
On the earnings front, JP Morgan Chase (JPM) reported second-quarter net income that firmly beat Wall Street estimates, but Xilinx Inc. (XLNX), Cintas (CTAS), Harley Davidson (HOG), and Marriott International (MAR) offered a mixed bag of results, limiting the optimism.
After the close of trading today, traders will look to results from tech giants IBM Corp. (IBM) and Google (GOOG).
Traders are also keeping an eye on Capitol Hill, where former Treasury Secretary Henry Paulson is testifying before Congress, answering questions from lawmakers regarding the controversial Bank of America (BAC) and Merrill Lynch merger that took place late last year.
The major averages have moved to the upside in recent trading and are currently posting modest gains. The Dow is currently up 16.86 at 8,633.07, the Nasdaq is up 3.04 at 1,865.94 and the S&P 500 is up 0.26 at 932.94.
The major sectors are split, contributing to the lack of conviction being shown by the equity markets in mid-morning trading.
Biotechnology stocks are turning in strong performances, as reflected by the 3.1 percent gain being shown by the NYSE Arca Biotechnology Index. With the gain, the index is moving further off a roughly one-month closing low set last Wednesday.
While pharmaceutical, trucking and defense stocks are also moving higher, brokerage and commercial real estate stocks are posting steep losses. The NYSE Arca Securities Broker/Dealer Index and the Morgan Stanley Real Estate Index are down by 1.8 percent and 1.4 percent, respectively. The retreat by the indices has partially offset yesterday's strong gains.
Further, banking and airline stocks are also seeing notable weakness, with the Kbw Bank Index down by 1.1 percent, while the NYSE Arca Airline Index is down by 1.3 percent.
While the banking index is pulling back off of a one-month closing high set on Wednesday, the airline index is backing off of a roughly two-month closing high also set in the previous session.
Stocks Driven By Analyst Comments
Shares of Senorx (SENO) are surging higher in mid-morning trading after being upgraded by Citigroup to Buy from Hold. The stock is up by 10.8 percent, rising to is best intraday level in just under nine months.
Esterline Technologies (ESL) is also on the rise following an upgrade by Credit Suisse, which raised its rating on the stock to Outperform from Neutral. Shares of the aerospace and defense specialist are up by 9.3 percent, rising to their best intra-day price in just over one month.
On the other hand, Medarex (MEDX) is falling after being downgraded by UBS to Neutral from Buy. The stock is down by 5.3 percent, moving off of the eleven-month closing high set in the previous session.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Thursday, with Hong Kong's Hang Seng Index climbing by 0.6 percent and Japan's benchmark Nikkei 225 Index closing up by 0.8 percent.
The major European markets are also climbing, with the German DAX Index up by 0.9 percent while the French CAC 40 Index is advancing by 1.4 percent. The U.K.'s FTSE 100 Index is also moving higher, rising by 0.4 percent.
In the bond markets, treasuries are seeing notable strength amid the lack of conviction on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.522 percent, posting a loss of 7.4 basis points on the day.
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