Stocks have pared a portion of their earlier gains in mid-afternoon trading on Wednesday, as the Federal Reserve's Beige Book report outlined a pullback in the pace of the economic recovery.
The major averages have come off of their best levels but remain elevated. The Dow is currently up 48.93 points or 0.5 percent at 10,389.62, the Nasdaq is up 18.59 points or 0.8 percent at 2,227.48 and the S&P 500 is up 7.29 points or 0.7 percent at 1,099.13.
A short time ago, the Fed's Beige Book said that U.S. growth slowed over the past few weeks, citing a drop-off in the strength of economic data, although the report stated that the economy continued its modest expansion.
Specifically, consumer spending continued to flicker despite the slowdown, although the prices of goods remained relatively tame, evident of the lack of inflationary pressure in the economy.
The markets are also digesting comments from President Barack Obama, who is speaking in Ohio regarding his plan to extend tax cuts for the middle class, increase business tax write-offs, and spending an additional $50 billion on infrastructure projects.
Early gains came after the Portuguese government successfully auctioned just over 1 billion euros worth of three and ten-year bonds, with the sales drawing solid demand.
At 3:00 p.m. ET, the Fed will release a separate report on consumer credit in July. Economists expect that consumer credit declined by $5.25 billion during the month following a $1.3 billion contraction in the previous month.
In corporate news, British telecom giant Vodafone Plc (VOD) confirmed that it has agreed to sell its entire 3.2 percent interest in China Mobile for 4.3 billion pounds, or $6.6 billion. Vodafone will continue its commercial and technology cooperation with China Mobile.
Packaged food company General Mills Inc. (GIS) said it expects its first-quarter results to be in line with its expectations and also reaffirmed its fiscal 2011 adjusted earnings forecast.
Fresh meat and packaged meat products company Smithfield Foods Inc. (SFD) reported a first quarter profit compared with a year-ago loss, reflecting higher prices in a favorable business environment. Total sales rose 7 percent year-over-year but came in below analysts' forecast. The company also maintained its positive outlook for fiscal 2011.
Dow Components
A majority of the Dow components are on the upside in mid-afternoon trading, helping to boost the value of blue chip index.
Alcoa (AA) and JP Morgan Chase (JPM) are two of the leading percentage gainers in the Dow, rising by 2.7 percent and 2.4 percent, respectively. With the advance, the stocks are on pace to end at monthly highs.
Caterpillar (CAT), Boeing (BA), General Electric (GE) and Pfizer (PFE) are also markedly higher, while Hewlett Packard (HPQ) is posting a steep loss on the day.
Shares of HP are down by 3.6 percent as the firm looks for a successor to Mark Hurd who has left to take the position of co-President at Oracle (ORCL) while also attempting to stop Hurd's move by filing a conflict of interest lawsuit.
Sector News
Trucking and railroad stocks are still posting strong gains, with the Dow Jones Trucking Index and the Dow Jones Railroad Index both gaining nearly 2 percent.
The trucking index is on pace for a one-month closing high, while the railroads index is on target for a four-month closing high.
Banking, steel, and biotechnology stocks are also holding onto strong gains but are off of their best levels.
Meanwhile, weakness remains visible among semiconductor stocks. The Philadelphia Semiconductor Index is down by 0.6 percent after being down by roughly 1 percent in earlier trading.
Other Markets
Overseas, stock markets in the Asia-Pacific region ended mostly lower on Wednesday. Japan's benchmark Nikkei 225 Index sank by 2.2 percent, while Hong Kong's Hang Seng Index slid by 1.5 percent.
Meanwhile, the major European markets saw solid gains. The French CAC 40 Index and the German DAX Index gained 0.9 percent and 0.8 percent, respectively, while the U.K.'s FTSE 100 Index rose by 0.4 percent.
In the bond markets, treasuries are modestly lower after a solid ten-year note auction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.641 percent, posting a gain of 3.2 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.