Stocks Turn Mixed After Seeing Initial Strength - U.S. Commentary

The day's latest economic data saw limited market reaction amid light trading volume, with Reuters and the University of Michigan releasing their final report on consumer sentiment in the month of August.

The report showed that the consumer sentiment index came in at 65.7 in August compared to the mid-month reading of 63.2, although it remained below the final July reading of 66.0. Economists had been expecting a more modest upward revision to a reading of 64.0.

Earlier, the Commerce Department released a report showing that personal income was nearly unchanged in July, although the data also showed a modest increase in personal spending that came in line with economist estimates.

With income unchanged and spending rising, personal saving as a percentage of disposable personal income fell to 4.2 percent in July compared with 4.5 percent in June.

Early positive sentiment came from the tech sector, with Intel (INTC) saying that it now expects revenue for the third quarter to be approximately $9.0 billion, which exceeds the $8.55 billion forecast by analysts.

Additional optimism was generated by Dell (DELL), which reported second-quarter net income of $0.24 per share and revenues of $12.76 billion. Excluding $0.04 per share in expenses for organizational effectiveness actions, Dell earned $0.28 per share. Wall Street analysts expected the company to earn $0.23 per share on $12.59 billion in revenues.

Also on the tech front, Marvell Technology Group (MRVL) reported adjusted second quarter net income of $0.18 per share and sales of $640.6 million. The figures beat consensus estimates that called for earnings of $0.14 per share on $619.83 million in sales.

The major averages have moved to the upside in recent trading, although they currently remain stuck on opposite sides of the unchanged line. While the Nasdaq is currently up 8.39 at 2,036.12, the Dow is down 22.07 at 9,558.56 and the S&P 500 is down 0.43 at 1,030.55.

Sector News

Semiconductor stocks are the day's strongest performers, with the Philadelphia Semiconductor Index posting a gain of 2.2 percent. With the advance, the index has reached an eleven month intraday high.

Within the sector, shares of Intel are currently up 4.2 percent after raising its guidance. STMicroelectronics (STM) is also posting a strong gain, advancing 9.7 percent after the company's third quarter sales forecast exceeded Wall Street estimates.

Computer hardware and electronic storage stocks are also on the rise, with the NYSE Arca Computer Hardware Index and the NYSE Arca Disk Drive Index up by 1.4 percent and 1 percent, respectively.

The hardware index has climbed to its best intraday level in twenty-two months, while the disk drive index has set an eleven-month intra day high.

While brokerage, gold, steel and banking stocks are also moving higher, weakness is visible among tobacco, health insurance and utility stocks. The NYSE Arca Tobacco Index is backing further off of a ten month high.

Stocks Driven By Analyst Comments

Shares of Armstrong World Industries (AWI) are on the rise in mid-morning trading after being upgraded by Sun Trust from Neutral to Buy. The broker cited the firm's share price, decreased leverage and market share as reasons for the ratings change. The stock has shot up by 6.5 percent, setting an eleven-month intraday high.

Pacific Sunwear (PSUN) is also moving higher following an upgrade at Pali Research, which raised its rating on the stock to Buy from Neutral. The stock has surged up by 9.2 percent, but remains stuck in this month's trading range.

On the other hand, Mosaic Co. (MOS) is retreating after being downgraded by UBS from Buy to Neutral. Shares of the agricultural nutrient manufacturer have slipped by 3.4 percent, setting a one-month intraday low at is low of the session. Shares of Potash (POT) have also come under pressure after being downgraded by the same broker.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher to close out the week. Japan's benchmark Nikkei 225 Index rose by 0.6 percent.

The major European markets are also moving higher, with the German DAX Index and the U.K.'s FTSE 100 Index both up by 1.1 percent, while the French CAC 40 Index is up by 1.6 percent.

In the bond markets, treasuries have moved well off of their worst levels of the day but remain negative. Subsequently the yield on the benchmark ten-year note is trading at 3.477 percent, posting a gain of 1.5 basis points.

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