RTTNews - Stocks are continuing their lackluster performance in mid-afternoon trading on Tuesday, failing to sustain any direction following the morning's economic and earnings news. The major averages have been swinging between gains and losses throughout the session, marred by another low volume outing.

Generating further optimism in the housing market was a report released by the National Association of Realtors, which showed that pending home sales growth in June exceeded economist estimates by a wide margin. With the increase, the pending sales rose for the fifth consecutive month.

Earlier, the Commerce Department released a report showing that personal spending increased by slightly more than expected in June, while personal income fell by more than expected.

On the earnings front, Centex (CTX) was one of the few bright spots among a slew of disappointing results that included Pulte (PHM), D.R. Horton (DHI), Archer Daniels Midland (ADM) and Tenet Healthcare (THC), among others.

While stocks have showed largely a lack of direction, the ability of the major averages to hold onto the bulk of yesterday's strong gains could still be seen as a positive sign for the markets.

The major averages are currently turning in a mixed performance, although they are all nearly unchanged. While the Nasdaq is down 1.75 at 2,006.86, the Dow is up 7.49 at 9,294.05 and the S&P 500 is up 0.24 at 1,002.87.

Dow Components

The modest gain currently being shown by the Dow comes even though a majority of the components of the blue chip index are in negative territory.

A strong performance by Caterpillar (CAT) is contributing to the gain by the Dow, with the construction equipment maker currently up 5.9 percent. With the gain, the stock is poised to end the session at its best closing price in nearly ten months.

The gain by Caterpillar comes after the company said that its recent cost cuts and planning would boost the firm's long-term profitability.

Bank of America (BAC) and Travelers (TRV) are also rising by substantial margins, gaining by 3.5 percent and 3 percent, respectively. Bank of America is looking to close at its best level in nearly nine months, while Travelers is poised to finish at its best price in over ten months.

While JP Morgan Chase (JPM) and Alcoa (AA) are also moving higher, shares of Merck (MRK) are turning in a disappointing performance, posting a loss of 0.7 percent. The retreat is pulling the stock further away from its best level in nearly eight months.

Further, Verizon (VZ) is down by 1 percent and Cisco (CSCO) is slipping by 1.1 percent. Verizon is backing further off of a four month closing high, while Cisco is being dragged way from a ten-month closing high set on Monday.

Sector News

Commercial real estate stocks are seeing notable strength in mid-afternoon trading, with the Morgan Stanley REIT Index rising by 5.2 percent. The gain has propelled the index to its best intra-day level in eight months.

While airline stocks also continue to advance, considerable moves to the upside are also being shown by housing and banking stocks. The Philadelphia Housing Sector Index and the Kbw Banking Index are up by 2.4 percent and 2.8 percent, respectively.

The housing index has risen to its best level in well over nine months, while the banking index has risen to its highest level since mid-May.

While biotechnology, defense and gold stocks are also moving notably higher, oil service, steel and healthcare provider stocks are retreating by considerable margins.

Notably, the Morgan Stanley Healthcare Provider Index is down by 1 percent, pulling back off its best closing level in nearly eleven months.

In Focus: Economic Data, Earnings News

As mentioned above, the NAR said its pending home sales index jumped 3.6 percent to 94.6 in June from an upwardly revised reading of 91.3 in May. Economists had been expecting a much more modest increase by the index of about 0.7 percent.

NAR noted that pending home sales haven't shown five consecutive monthly increases since July of 2003.

Separately, the Commerce Department said personal spending rose 0.4 percent in June following a revised 0.1 percent increase in May. Economists had been expecting spending to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.

At the same time, the Commerce Department said that personal income fell by 1.3 percent in June after increasing by a revised 1.3 percent in the previous month. The decrease compares to economist estimates of a 1.0 percent decline.

Subsequently, the report said that personal saving as a percentage of disposable personal income was 4.6 percent in June compared with 6.2 percent in May.

In earnings news, Pulte Homes reported a second quarter net loss of $0.74 per share, compared to a net loss of $0.63 per share in the same period last year. Analysts had expected the company to report a loss of $0.57 per share for the quarter.

Pulte said total revenues for the quarter fell to $678.58 million from $1.62 billion in the prior year quarter. Analysts had consensus revenue estimate of $647.07 million.

Meanwhile, Centex reported first-quarter net earnings of $0.68 per share, compared to a loss of $1.21 per share in the same quarter of last year. Total revenues were $574 million, down 49 percent from $1.13 billion in the year ago quarter.

Pulte and Centex shareholders are expected to vote on a merger between the two companies on August 18th after Pulte offered to buy Centex for $1.3 billion in stock in April. The move would create the largest homebuilder in the U.S.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished Tuesday's trading on a mixed note. Hong Kong's Hang Seng Index posted a loss 0.1 percent, while Japan's benchmark Nikkei 225 Index ended the session higher by 0.2 percent.

The major European markets closed modestly lower, with the French CAC 40 Index and the U.K.'s FTSE 100 Index both finishing lower by 0.2 percent. Meanwhile, the German DAX Index posted a much more modest loss, falling by less than a tenth of a percentage point.

In the bond markets, treasuries are seeing notable losses, but they have moved off of their worst levels of the day. Subsequently, the yield on the benchmark ten-year note is trading at 3.690 percent, posting a gain of 5.1 basis points on the day.

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