Stocks have come well off of their lows and are turning in a lackluster performance in early afternoon trading on Wednesday, even as the day's data on new home sales and durable goods came in much worse than expected. The major averages have seen a choppy climb from their morning lows and are currently drifting modestly below the flat line.
The Dow is down 38.75 points or 0.4 percent at 10,001.70, the Nasdaq is down 3.17 points or 0.2 percent at 2,120.59 and the S&P 500 is down 4.88 points or 0.5 percent at 1,046.99.
Shortly after the start of trading, the Commerce Department said that new home sales plunged by 12.4 percent to an annual rate of 276,000 in July from the revised June rate of 315,000. With the steep drop, new home sales fell to their lowest level on records dating back to 1963.
The decrease came as a surprise to economists, who had expected sales to edge up to 334,000 from the 330,000 originally reported for the previous month.
Commenting on the data, Paul Dales, U.S. economist at Capital Economics, said, "Admittedly, sales are unlikely to remain quite this low for long."
"Nonetheless, high unemployment, weak income growth, falling confidence and tight credit will mean that any rebound will be modest," he added.
In a separate report this morning, the Commerce Department reported that durable goods orders edged up by 0.3 percent in July, well short of expectations for a 3.0 percent surge.
Excluding a double digit jump in orders for transportation equipment, durable goods orders fell sharply, while economists had expected a pickup in the ex-transports number.
In earnings news, Toll Brothers Inc. (TOL) reported third-quarter net income compared to a heavy loss last year, beating forecasts. The firm's quarterly revenues also topped expectations, although its fourth quarter revenues were projected lower compared to a year ago.
BHP Billiton (BHP) reported a full-year 2010 profit that more than doubled but still missed estimates while offering a cautious short-term economic outlook.
In other corporate news, Anglo-Australian miner Rio Tinto Plc (RTP), along with a Chinese partner, is reportedly considering a bid for fertilizer producer Potash Corp. (POT) after the world's biggest fertilizer marker rejected BHP Billiton's approximately $40 billion hostile bid.
Sector News
Airline stocks remain among the day's worst performers, with the NYSE Arca Airline Index down by 2.2 percent. The decline has dragged the index down to its lowest intraday level in nearly seven weeks.
Oil service stocks are also notably lower, dragging the Philadelphia Oil Service Sector Index down by 1.7 percent. The index is on pace for a seven-week closing low even as the price of oil is nearly at a standstill in today's dealing, currently at $71.57 a barrel.
Steel, banking, utility and natural gas stocks are also trading lower, while strong gains by gold, healthcare, biotechnology and housing stocks have helped the major averages to find their way back toward the flat line.
Notably, the Morgan Stanley Healthcare Payor Index is up by 2.1 percent, bouncing off of its lowest closing level in nearly a month.
Strength is also visible among housing stocks, with the Philadelphia Housing Sector up by 1 percent despite yesterday's dismal existing home sales report and today's underwhelming new home sales data.
Stocks In The News
Verifone Systems (PAY) is notably higher after the company reported third quarter net income and revenues that topped analyst expectations. The stock has gained 8.7 percent, setting its highest intraday price in over two and a half years.
Pacific Sunwear (PSUN) reported a second quarter loss of $0.22 cents per share, which was just better than the $0.23 per share loss forecast by analysts. Shares are up by 1.7 percent, moving off of yesterday's two-week closing low.
Meanwhile, Coinstar (CSTR) is lower after it announced a definitive agreement to sell its money transfer business to Sigue Corp. for $41.5 million. The stock is down by 1.8 percent, moving further off of last week's two-month closing high.
Other Markets
Overseas, stock markets in the Asia-Pacific region extended their downside on Wednesday. Japan's benchmark Nikkei 225 Index fell by 1.7 percent and Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets also ended lower. The U.K.'s FTSE 100 Index and the German DAX Index fell by 0.9 percent and 0.6 percent, respectively, while the French CAC 40 Index slid by 1.2 percent.
In the bond markets, treasuries are modestly higher after giving up the majority of their earlier gains. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 2.479 percent, posting a loss of 2 basis points.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.