RTTNews - Following an early pullback, stocks have recovered and are posting modest gains in mid-morning trading on Wednesday, helped by the day's encouraging new home sales data. The major averages are all in positive territory by small margins, looking to build on yesterday's gains.

Trader sentiment was bolstered by data on new home sales, which increased by much more than expected in the month of July, according to a report released by the Commerce Department.

The report showed that new home sales surged up by 9.6 percent to an annual rate of 433,000 in July from the revised June rate of 395,000. Economists had been expecting sales to edge up to 390,000 from the 384,000 originally reported for the previous month.

Earlier, traders digested a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July, with the growth largely due to a substantial rebound in orders for transportation equipment.

The report showed that new orders for durable goods jumped 4.9 percent in July following a revised 1.3 percent decrease in June. Economists had expected orders to increase by 3.2 percent compared to the 2.2 percent decrease that had been reported for the previous month.

Excluding an 18.4 percent increase in orders for transportation equipment, durable goods orders increased by a much more modest 0.8 percent in July compared to a 2.5 percent increase in June. The increase came in below economist estimates of 1.0 percent growth.

On the earnings front today, Myriad Genetics Inc. (MYGN) reported fourth quarter earnings of $0.24 per share after the bell Tuesday, beating the consensus estimate of $0.22 per share, although revenues failed to meet expectations.

Brown Shoe Company (BWS) reported a quarterly net loss that came in line with estimates, while Charming Shoppes (CHRS) edged out earnings forecasts. Both firms' revenues failed to meet Wall Street expectations.

In recent trading, the major averages have pulled back off their highs for the session, although they currently remain n positive territory. The Dow is currently up 29.47 at 9,568.76, the Nasdaq is up 6.21 at 2,030.44 and the S&P 500 is up 2.43 at 1,030.43.

Sector News

Despite the volatility seen in morning trading, biotechnology stocks are turning in some of the day's strongest performances, with the NYSE Arca Biotechnology Index surging up by 5.2 percent, extending its gains and setting a fresh historic intraday high.

Human Genome Sciences (HGSI) continues to help lead the sector higher, benefiting from rumors that it will be taken over by GlaxoSmithKline (GSK). Human Genome Sciences has shot up by 15.5 percent, rising to its best intraday level in seven and a half years.

The housing sector is also on the rise following the day's upbeat data, with the Philadelphia Housing Sector Index up by 2.4 percent on the day. The index is adding to its recent gains and has climbed to a fresh intraday high, its best in nearly eleven months.

The upward move in the index is being led by shares of homebuilder Hovnanian (HOV), which have jumped by 9.2 percent. The advance has also propelled the stock to a nearly eleven-month intraday high.

While networking, computer hardware, and airline stocks are also on the rise, some weakness remains visible among resource stocks.

Gold and steel stocks are falling by notable margins, with the NYSE Arca Gold Bugs Index and the NYSE Arca Steel Index sliding by 1.3 percent and 0.9 percent, respectively. The dip by resource stocks comes amid a retreat in commodities prices.

Stocks Driven By Analyst Comments

Shares of Burger King Holdings (BKC) are sliding in mid-morning trading after being downgraded by Wedbush Morgan from Outperform to Neutral. The stock is sliding by 3.5 percent, pulling back off the four-month closing high set in the previous session.

Netezza Corp. (NZ) is also retreating following a downgrade by Canaccord Adams, which lowered its rating to Hold from Buy. Shares of the data warehouse appliance provider are down by 3.4 percent, slipping further away from the nearly eleven month closing high set last Friday.

On the other hand, oil tanker firm General Maritime (GMR) is on the rise after being upgraded by FBR Capital from Market Perform to Outperform. The broker cited the alluring price of the stock following its recent pullback. The stock is gaining by 5.9 percent, bouncing further off of last week's four and a half month low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Wednesday. Japan's benchmark Nikkei 225 Index rose by 1.4 percent, while China's Shanghai Composite Index closed up 1.8 percent.

Meanwhile, the major European markets have turned mixed after seeing earlier weakness. The French CAC 40 Index is up 0.2 percent, while the German DAX Index and the U.K.'s FTSE 100 Index both remain down 0.7 percent.

In the bond markets, treasuries are seeing choppy movement ahead of a five-year note auction. The yield on the benchmark ten-year note is trading at 3.448 percent, essentially unchanged on the day.

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