RTTNews - Stocks are showing a lack of conviction in mid-afternoon trading after a hot start on Tuesday, as a mix of profit taking and low volume is dampening any significant movement. The major averages are currently turning in a mixed performance.

Early buying interest was generated after a slew of largely positive promising earnings, with five Dow components reporting their quarterly results. Despite beating Wall Street estimates, Caterpillar (CAT), Coca-Cola (KO), DuPont (DD), Merck (MRK) and United Technologies (UTX) have seen mixed reaction.

In other news, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee today, stating that the U.S. economy is showing signs of stabilization and that the stimulus authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system.

Bernanke also said that the Fed is prepared to remove its stimulus when the time is appropriate in order to avoid a spike in inflation. However, he reiterated that the economy is still in a fragile state, with unemployment high and consumer spending shaky. The Fed chief is scheduled to delivery his second day of testimony Wednesday morning at 10:00 a.m. ET.

Meanwhile, President Barack Obama continued to push for the passage of his healthcare plan this afternoon, looking to gather additional support for the much-discussed bill that aims to provide universal healthcare.

The major averages have seen choppy movement in recent trading, unable to sustain any significant moves. While the Dow is currently up 14.06 at 8,862.21, the Nasdaq is down 5.55 at 1,903.74 and the S&P 500 is down 2.84 at 948.29.

Dow Components

A mixed performance by the Dow components is contributing to the lack of direction being shown by the blue chip index.

Shares of Caterpillar are the leading gainers in the Dow, rising by 7.5 percent, while Merck is also boosting the blue chip index, posting a gain of 5.2 percent.

Caterpillar has climbed to its best intraday level in over six months, while Merck reached its highest intraday price in over five months earlier in the day.

Meanwhile, shares of Coca-Cola are under pressure, dropping by 2.3 percent on the day. The decline has dragged the stock well off its best closing price in well over nine months.

Shares of Alcoa (AA) have also shown a notable decline, falling by 4.7 percent. The day's pullback has dragged the stock away from its best closing level in nearly a month set in the previous session.

Further, United Technologies and General Electric (GE) are also retreating, with both falling by 2.3 percent. Both of the stocks are moving off of their best levels in roughly one month's time.

Sector News

Banking and airline stocks continue to retreat by considerable margins on the day along with computer hardware stocks. The NYSE Arca Computer Hardware Index is down by 2.2 percent, pulling back off of its best closing level in over a year.

Commercial real estate, steel and gold stocks are also on the decline. The Morgan Stanley Real Estate Index is down by 2 percent, while the NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index are down by 1.7 percent and 1.9 percent, respectively.

With the decline, the indices are all pulled back off their best closing levels in roughly one month set in the previous session.

Some of the day's losses are being offset by strength among biotechnology, electronic storage, chemical, and pharmaceutical stocks.

In Focus: Earnings Reports

As mentioned above, several Dow components reported their quarterly results today, with Caterpillar reporting a second-quarter profit of $0.60 per share, down from $1.74 per share in the year-ago quarter. Wall Street analysts expected the company to earn $0.22 per share.

Coca-Cola revealed adjusted second-quarter net income of $0.92 per share, down from $1.01 per share in the same quarter last year. Nonetheless, the firm beat analyst forecasts of $0.89 per share.

Chemical giant DuPont reported adjusted second-quarter net income of $0.61 per share, surpassing expectations of $0.53 per share for the quarter. Meanwhile, net sales for the quarter declined compared to the same period last year and fell short of estimates.

Merck posted adjusted second quarter net income of $0.83 per share, compared to $0.86 per share in the previous year quarter. The results exceeded analysts' consensus estimate of $0.77 per share.

Additionally, United Technologies disclosed second quarter net income of $1.05 per share, compared to $1.32 per share in the year ago quarter. Results for the recent quarter include $0.22 per share in restructuring costs and $0.06 per share from a one-time gain.

After the closing bell today, traders will look to quarterly results from Apple (AAPL), Yahoo! (YHOO) and Advanced Micro Devices (AMD).

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's benchmark Nikkei 225 Index posted a 2.7 percent gain, China's Shanghai Composite Index fell 1.6 percent.

Meanwhile, the major European markets all closed the day showing strong gains, with the German DAX Index and the French CAC 40 Index finishing up by 1.3 percent and 1 percent, respectively, while the U.K.'s FTSE 100 Index saw a 0.9 percent gain.

In the bond markets, treasuries are hovering near their best levels of the day. Subsequently, the yield on the benchmark ten-year note is trading at 3.477, posting a loss of 10.8 basis points.

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