RTTNews - After moving to the downside at the open, stocks remain stuck just below the unchanged line in mid-morning trading on Wednesday as traders digest a mixed batch of economic and earnings news. The major averages are all in negative territory by modest margins, seeing another lackluster performance.

On the economic front, the Commerce Department released a report showing that orders for transportation equipment declined sharply in June, contributing to a substantial decline in orders for manufactured durable goods.

The report showed that durable goods orders fell 2.5 percent in June following a downwardly revised 1.3 percent increase in May. Economists had expected orders to fall 0.6 percent compared to the 1.8 percent increase originally reported for the previous month.

Excluding a 12.8 percent decrease in orders for transportation equipment, orders for durable goods actually rose 1.1 percent in June compared to a 0.8 percent increase in May. The increase surprised economists, who had expected ex-transportation orders to come in unchanged.

Later today, the Federal Reserve is due to release its Beige Book, which is a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. The report is due to be released at 2 p.m. ET.

In earnings news, Time Warner (TWX) reported adjusted second quarter net income of $0.45 per share, compared to $0.47 per share in last year's second quarter. While the earnings beat analyst estimates of $0.37 per share, revenues of $6.81 billion fell short of the expected $6.97 billion.

Meanwhile, Sprint Nextel (S) reported a second-quarter net loss of $0.13 per share compared to a loss of $0.12 per share in the same quarter last year. The telecom company also said its revenue fell 10 percent to $8.14 billion amid a decrease in subscribers.

Energy firm ConocoPhillips (COP) reported second-quarter earnings of $0.87 per share, compared with net income of $3.50 per share in the same quarter last year. While the results beat analyst estimates of $0.85 per share, revenues fell well short.

In other news, Yahoo! (YHOO) and Microsoft (MSFT) have signed an agreement whereby Microsoft would now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies' premium search advertisers. The deal is expected to close sometime in 2010 and has a lifespan of 10 years.

The major averages have moved well off their lows for the session, but they have been unable to break into positive territory. The Dow is currently down 40.66 at 9,056.06, the Nasdaq is down 10.27 at 1,965.24 and the S&P 500 is down 5.99 at 973.63.

Sector News

Resource stocks are extending their pullback from the previous session, with notable losses visible among steel, oil service, natural gas and gold stocks. The move comes as commodities prices are falling for another session.

The NYSE Arca Steel Index is under considerable pressure, falling by 4.8 percent. With the loss, the index being pulled further off the roughly seven-week high it set on Monday.

The index is being hurt by shares of Arcelor Mittal (MT), which are sliding by 7.5 percent, retreating from the nearly ten-month closing high set earlier this week. The decline comes after the firm reported a much steeper than expected loss, while sales also failed to meet forecasts.

While electronic storage, semiconductor and airline stocks are also sliding, health insurance stocks are posting notable gains. The Morgan Stanley Healthcare Payor Index is up 2.7 percent, with WellCare Health Plans (WCG) leading the way higher after reporting much stronger than expected second quarter earnings growth.

Some biotechnology, healthcare provider, and banking stocks are also bucking the day's downtrend, but they are posting more modest gains.

Stocks Driven By Analyst Comments

Shares of Interpublic Group (IPG) are sliding in mid-morning trading after the stock was downgraded at Wedbush Morgan from Outperform to Neutral. The broker also lowered the target price from $5.75 to $5.50. The stock is down by 4.4 percent, pulling back further off the nearly three-month closing high set last Friday.

On the other hand, shares of Campbell Soup (CPB) are on the rise after RBC Capital Markets raised its rating on the stock from Underperform to Sector Perform. The stock is up by 1.9 percent, reaching its best intraday price in well over five months earlier in the session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished largely on the downside on Wednesday. Hong Kong's Hang Seng Index slid by 2.4 percent, although Japan's benchmark Nikkei 225 Index bucked the downtrend and closed up by 0.3 percent.

Meanwhile, the major European markets continue to move higher, with the German DAX Index and the French CAC 40 Index rising by 2.2 percent and 1.5 percent, respectively, while the U.K.'s FTSE 100 Index is up by 0.9 percent.

In the bond markets, treasuries are seeing notable strength amid the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.644 percent, posting a loss of 4.4 basis points on the day.

For comments and feedback: contact editorial@rttnews.com