Stocks Continue Lackluster Outing In The Mid-Afternoon - U.S. Commentary

(RTTNews) - Stocks remain sluggish in mid-afternoon trading on Friday, as traders largely panned the day's economic data and did some profit taking following the run-up seen in the previous session. The major averages are on opposite sides of the unchanged mark by minute margins, bogged down by another low volume trading day.

Earlier, data from the Commerce Department indicated that personal income increased by much more than expected in the month of May, although the jump was due in large part to increased government social benefit payments.

A separate report from Reuters and the University of Michigan showed that consumer sentiment in the month of June improved by more than previously estimated.

The major indices have remained in a range in recent trading, with the tech-heavy Nasdaq continuing to post a mild gain. While the Nasdaq is currently up 1.18 at 1,830.72 the Dow is down 55.17 at 8,417.23 and the S&P 500 is down 4.00 at 916.26.

Dow Components

A majority of the Dow components are treading on the downside, contributing to the modest pullback by the blue chip index.

Shares of American Express (AXP | Quote | Chart | News | PowerRating) are leading the way lower, falling by 3.1 percent on the day. Despite the notable loss, the stock remains stuck in roughly a two-month trading range.

Microsoft (MSFT | Quote | Chart | News | PowerRating) is also slipping, posting a loss of 1.6 percent in mid-afternoon trading. With the decline, the stock is backing off of a four month closing high set in mid-June.

Shares of Boeing (BA | Quote | Chart | News | PowerRating), Wal-Mart (WMT | Quote | Chart | News | PowerRating) and Exxon Mobil (XOM | Quote | Chart | News | PowerRating) are also retreating, falling by comparable margins. Wal-Mart and Exxon remain in a range ,while Boeing is lingering near the roughly two-month closing low set on Wednesday.

Meanwhile, shares of Home Depot (HD | Quote | Chart | News | PowerRating) are showing a strong upward move, advancing by 1.2 percent. The move is propelling the stock further away from the three month closing low set on Wednesday.

Bank of America (BAC | Quote | Chart | News | PowerRating) and Merck (MRK | Quote | Chart | News | PowerRating) are also on the rise, moving up by 1.5 percent and 0.9 percent, respectively. The Dow stalwarts are continuing to drift in a range, largely swinging between gains and losses in recent weeks.

Sector News

Resource stocks continue to see notable weakness on the day, with gold and natural gas stocks slipping by considerable margins. Subsequently, the NYSE Arca Gold Bugs Index and the Amex Natural Gas Index are falling by 1.4 percent and 0.9 percent, respectively.

Significant losses are also visible among healthcare provider and housing stocks, resulting in a 1.7 percent decline by the Morgan Stanley Healthcare Provider Index and a 1.3 percent loss by the Philadelphia Housing Sector Index.

Additional weakness is visible among software, defense and pharmaceutical stocks, which are giving back recent gains.

Meanwhile, moderate strength in the biotech sector has been prompted in part by a considerable gain by Amylin (AMLN | Quote | Chart | News | PowerRating), which has risen by 6.8 percent on the session. The upward move has the stock poised to finish at its best closing price in well over eight months.

Meanwhile, hardware stocks remain strong, as reflected by the 2.1 percent gain currently being shown by the NYSE Arca Computer Hardware Index. Palm (PALM | Quote | Chart | News | PowerRating) is leading the sector higher after reporting a narrower than expected fourth quarter loss.

Electronic storage, wireless communications, and internet stocks are also seeing upward moves, further reflecting the strength present in the tech segment, which has helped to buoy the tech-heavy Nasdaq.

In Focus: Economic Data, Earnings & Corporate News

As mentioned above, 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, a report from Reuters and the University of Michigan 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.

On the earnings front, KB Home (KBH | Quote | Chart | News | PowerRating) 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.

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

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 all finished on the downside, with the German DAX Index and the U.K.'s FTSE 100 Index dropping by 0.5 percent and 0.3 percent, respectively, while the French CAC 40 Index slipped by 1.1 percent.

In the bond markets, treasuries are extending their earlier gains. Subsequently, the yield on the benchmark ten-year note is trading at 3.49 percent, a drop of 5.4 basis points on the day.

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