Stocks have given up some of their earlier gains in early afternoon trading on Wednesday, as a lack of substantive clues on the economy has limited trading enthusiasm for yet another session. The major averages are on opposite sides of the unchanged mark, although the Nasdaq is still posting a solid gain.
On the economic front today, the Commerce Department reported that wholesale inventories unexpectedly edged down by 0.2 percent in January following a revised 1.0 percent drop in December. The decrease came as a surprise to economists, who had expected inventories to rise by 0.2 percent versus the 0.8 percent drop originally reported for the previous month.
At the same time, the Commerce Department said that wholesale sales surged up by 1.3 percent in January after increasing by 1.2 percent in the previous month. With the increase, wholesale sales increased for the tenth straight month.
At 2:00 p.m. ET, the Treasury Department will unveil its budget for February. Economists anticipate the budget to show a deficit of $222 billion for February following a $42.6 billion deficit in January.
In corporate news, InterMune Inc. (ITMN) announced after the bell Tuesday that the FDA Pulmonary-Allergy Drugs Advisory Committee voted 9-3 to recommend approval of Esbriet, for the treatment of patients with idiopathic pulmonary fibrosis, to reduce decline in lung function. The stock has surged up by more than 65 percent in reaction to the news.
Additionally, apparel retailer J. Crew Group, Inc. (JCG) swung to a fourth quarter profit, helped by higher sales and improved margins. The company's quarterly earnings per share breezed past Wall Street expectations as did its quarterly revenue. Looking ahead, J. Crew forecast fiscal 2010 earnings above analysts' current consensus estimate.
In global economic news, China revealed that its exports grew substantially in February, raising fresh concerns that the country might resort to more policy tightening measures to cool its overheating economy.
According to the General Administration of Customs, exports surged up 45.7 percent year-on-year to $94.52 billion in February, while imports jumped 44.7 percent to $86.91 billion.
The major averages have seen some further downside in recent trading, with the S&P 500 pulling back near the unchanged line. While the Nasdaq is up 9.80 points or 0.4 percent at 2,350.48, the S&P 500 is up just 0.05 points at 1,140.49 and the Dow is down 34.31 points or 0.3 percent at 10,530.07.
Sector News
Airline stocks remain some of the day's strongest performers, although they have pulled back off of their best levels. The NYSE Arca Airline Index is up by 2.2 percent after setting a two-year intraday high in earlier dealing.
Semiconductor stocks are also continuing to post strong gains, with the Philadelphia Semiconductor Index up by 1.7 percent. With the upward move, the index has scaled to its best intraday level in two months.
Electronic storage, wireless and internet stocks are also holding onto gains, helping to keep the tech-heavy Nasdaq firmly in positive territory.
Meanwhile, gold stocks are weighing on the markets. The NYSE Arca Gold Bugs Index is down by 1.8 percent, extending a recent pullback. The weakness among gold stocks comes as gold for April delivery has fallen by $10.30 to $1,112 an ounce.
Stocks In The News
American Eagle Outfitters (AEO) is moving notably higher after projecting first quarter earnings per share above analyst estimates. The stock is currently up 5.8 percent after reaching its best intraday prince in over four months earlier.
Facet Biotech Corp. (FACT) is also on the rise after Abbott Laboratories (ABT) entered an agreement to buy the firm for $27 per share in cash. Shares of Facet have shot up by 66.6 percent, setting a more than one-year intraday high.
On the other hand, Navistar International Corp. (NAV) is slipping after the firm's first quarter sales missed some analyst forecasts. The stocks has fallen by 5.1 percent, pulling back off of yesterday's six-month closing high.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed little changed on Wednesday. Japan's benchmark Nikkei 225 Index slid less than a tenth of a percent, while Hong Kong's Hang Seng Index closed nearly flat.
Meanwhile, the major European ended the day with solid gains. The U.K.'s FTSE 100 Index rose by 0.7 percent, while the German DAX Index and the French CAC 40 Index both advanced by 0.9 percent.
In the bond markets, treasuries remain weaker ahead of today's ten-year note offering. The yield on the benchmark ten-year note is trading at 3.741 percent, posting a gain of 4 basis points.
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