Stocks are little changed in early afternoon trading on Friday, as a series of mixed economic reports has perplexed the markets. The major averages are lingering near the unchanged line, continuing to look for direction.
Equity prices plummeted early on after the Commerce Department said that gross domestic product increased at an annual rate of 2.4 percent in the second quarter compared to the revised 3.7 percent jump seen in the first quarter.
Economists had expected GDP to increase by 2.5 percent compared to the 2.7 percent growth that had been reported for the first quarter.
Commenting on the data, Neil MacKinnon, global macro strategist at VTB Capital said, "Data revisions have altered the cyclical profile but don't change the story that the pace of recovery is now slowing,"
He added, "In the absence of fresh fiscal stimulus, which peaked in Q2, the outlook for the U.S. economy during the rest of the year points towards the risk of further economic drift."
Meanwhile, consumer sentiment data from Thomson Reuters and the University of Michigan helped to lift the markets off of their session lows.
The report showed that the consumer sentiment index for July was upwardly revised to a reading of 67.8 from the preliminary estimate of 66.5. While the revised reading came in above economist estimates of 67.5, it remained well below the June reading of 76.0.
Further helping to erode initial selling pressure was a report from the Institute for Supply Management - Chicago, which said its business barometer rose to 62.3 in July from 59.1 in June, with a reading above 50 indicating growth in Chicago-area business activity. The increase surprised economists, who had expected the index to fall to a reading of 56.3.
In earnings news, Dow components Chevron Corp. (CVX) and Merck & Co. Inc. (MRK) reported earnings that beat Wall Street estimates but fell short of projections on the revenue front.
Another Dow stock, entertainment giant Walt Disney Co. (DIS) announced an agreement to sell Miramax Films to Filmyard Holdings for approximately $660 million.
The major averages have moved roughly sideways in recent trading, holding near the flat line. While the Nasdaq is up 1.43 points or 0.1 percent at 2,253.12, the Dow is down 16.50 points or 0.2 percent at 10,450.66 and the S&P 500 is down 1.26 points or 0.1 percent at 1,100.27.
Sector News
Health insurance stocks are posting some of the day's strongest gains, with the Morgan Stanley Healthcare Payor Index up by 1.9 percent. Within the sector, Amerigroup (AGP) is up by 3.4 percent and on pace for a fresh one-month high.
The gain by Amerigroup comes after the company reported strong second quarter earnings growth amid a 10 percent increase in membership.
Gold, networking, biotechnology and airline stocks are also posting strong gains. The 1.1 percent advance by the NYSE Arca Gold Bugs Index comes as the price of gold has risen by $8.60 to $1,170.00 an ounce.
Meanwhile, losses by telecom, semiconductor and utility stocks are offsetting some of the aforementioned upside. Semiconductor stocks remain among the day's steepest percentage decliners, resulting in a 1 percent drop by the Philadelphia Semiconductor Index.
Stocks In The News
Eastman Chemical (EMN) is notably higher after reporting second quarter adjusted earnings of $2.05 per share on revenues of $1.72 billion. Consensus estimates had called for earnings of $1.65 per share on revenues of $1.63 billion. The company also projected third quarter earnings above analyst estimates. Shares are currently up by 3.2 percent and are on pace for a five-week closing high.
KLA-Tencor (KLAC) is also on the upside after it reported fourth quarter non-GAAP earnings of $0.70 per share on revenues that nearly doubled to $559.42 million. Analysts estimated a profit of $0.60 per share on revenues of $558.15 million. The stock has gained 2.3 percent and is climbing back towards the two-month closing high set on Monday.
On the other hand, DTE Energy (DTE) is trading lower after its second quarter earnings came in at $0.51 per share, flat with last year and short of estimates for $0.60 per share. The stock has lost 4.3 percent and is on target for a three-week closing low.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended lower to close out the week. Japan's benchmark Nikkei 225 inched fell by 1.6 percent, while Hong Kong's Hang Seng Index declined by 0.3 percent.
Meanwhile, the major European markets ended the day mixed. The U.K.'s FTSE 100 Index and the German DAX Index fell by 1.1 percent and 0.2 percent, respectively, while the French CAC 40 Index rose by 0.2 percent.
In the bond market, treasuries are rallying. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.909 percent, posting a loss of 9 basis points.
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