RTTNews - After a strong outing in the previous session, stocks are showing a lack of conviction in mid-morning trading on Friday, as low volume has prompted some stagnation in the equity markets. The major averages are all in negative territory by modest margins, turning in another lackluster performance.

On the economic front, a report from the Commerce Department showed that personal income jumped 1.4 percent in May following an upwardly revised 0.7 percent increase in April, although the growth was due in large part to increased government social benefit payments.

The report also showed that that personal spending rose 0.3 percent in May after coming in unchanged in the previous month. The moderate increase in spending came in line with economist estimates.

Separately, consumer sentiment in the month of June has improved by more than previously estimated, according to the results of the Reuters/University of Michigan survey of consumers.

The report showed that the consumer sentiment index was revised up to 70.8 in June from the preliminary reading of 69.0, coming in well above the May reading of 68.7. Economists had been expecting the index to be unrevised at 69.0.

In earnings news, tech giant Palm (PALM) posted an adjusted fourth quarter loss of $0.40 per share, compared to a loss of $0.22 per share in the year-ago period. Wall Street analysts had expected the firm to report a loss of $0.62 per share.

KB Home (KBH) reported a second-quarter net loss of $1.03 per share, compared to a net loss of $3.30 per share for the same period last year. Analysts expected the company to report a loss of $0.64 per share for the quarter.

Memory chip maker Micron Technology (MU) revealed that its loss for the third quarter widened from a year ago. The firm attributed the loss to hefty charges and losses related to the disposal of semiconductor equipment and other items, as well as sharp decline in quarterly sales.

Meanwhile, Qantas said on Thursday that it has reached a mutual agreement with Boeing (BA) to defer the delivery of 15 aircraft by four years and cancel orders for 15 others scheduled for delivery in 2014 and 2015.

The major indices have experienced choppy trading for most of the morning, contributing to the day's insignificant moves. The Dow is currently down 33.41 at 8,438.99, the Nasdaq is down 1.30 at 1,828.24 and the S&P 500 is down 2.91 at 917.35.

Sector News

Some of the day's worst performances are being turned in by pharmaceutical stocks, as reflected by the NYSE Arca Pharmaceutical Index falling by 1.1 percent on the day. The index has bounced between gains and losses in recent sessions while remaining near its best closing level in over four months set last Friday.

Pulling the sector lower are shares of Sanofi Aventis (SNY), which are down by 5.5 percent on the day. With the decline, the stock is moving further off the nine-month high set last Friday and falling to its worst intraday level in over a month.

The continued decline by Sanofi Aventis comes amid concerns about the company's drug Lantus, which may pose a cancer risk. Further prompting the slide was a downgrade at Morgan Stanley, which changed its rating on the stock to Equal Weight from Overweight.

Additional downside is visible among healthcare provider and banking stocks, with the Morgan Stanley Healthcare Provider Index and the Kbw Bank Index both down 1.3 percent. The indices continue to trade within their respective ranges.

Meanwhile, some strength is visible among computer hardware stocks, as reflected by the 2 percent gain currently being shown by the NYSE Arca Computer Hardware Index. With the gain, the index has reached its best intraday level in nearly ten months.

Stocks Driven By Analyst Comments

Navistar (NAV) is climbing in mid-morning dealing after Wachovia upgraded its rating on the stock to Outperform from Market Perform. The broker attributed the upgrade to an expected pick up in earnings in 2011. The stock is up by 1.7 percent, reaching its best intra-day level in well over eight months earlier in the session.

On the other hand, shares of Overseas Shipholding (OSG) are falling after being downgraded by FBR Capital to Market Perform from Outperform. The broker also reduced the firm's target price to $34 from $37. The stock is down by 4.6 percent, moving further off of a five month closing high set earlier this month.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Friday's session showing moderately strong gains. Japan's benchmark Nikkei 225 Index closed up 0.8 percent, while Hong Kong's Hang Seng Index jumped 1.8 percent.

Meanwhile, the major European markets are now all on the downside, with the German DAX Index and the French CAC 40 Index down by 0.6 percent and 0.8 percent, respectively. The U.K.'s FTSE 100 Index is down by 0.4 percent.

In the bond markets, treasuries are seeing moderate strength. Subsequently, the yield on the benchmark ten-year note is trading at 3.511 percent, a drop of 3.5 basis points on the day.

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