Stocks Seeing Continued Volatility As Traders Digest Earnings - U.S. Commentary

(RTTNews) - After once again failing to sustain an initial upward move, stocks have seen some volatility over the course of the trading day on Wednesday. A mixed reaction to the latest batch of earnings news is contributing to the choppy trading.

The major averages are currently turning in another mixed performance, with the Nasdaq firmly in positive territory. While the Nasdaq is up 15.87 points or 0.4 percent at 3,595.15, the Dow is down 11.52 points or 0.1 percent at 15,556.22 and the S&P 500 is down 2.04 points or 0.1 percent at 1,690.35.

The tech-heavy Nasdaq is benefiting from a significant advance by shares of Apple (AAPL), with the iPad and iPhone maker currently up by 5.8 percent.

After the close of trading on Tuesday, Apple reported fiscal third quarter earnings that fell year-over-year but came in above analyst estimates. The company also reported better than expected revenues.

Meanwhile, notable drops by AT&T (T) and Caterpillar (CAT) are helping to keep the Dow in the red, with the stocks down by 1.8 percent and 1.5 percent, respectively.

The loss by AT&T comes after the telecom giant reported slightly weaker than expected second quarter earnings, while Caterpillar is under pressure after the construction equipment maker reported disappointing second quarter results and lowered its full-year guidance.

Traders are also digesting a report from the Commerce Department showing that new home sales rose by much more than expected in June, reaching their highest level in five years.

The report said new home sales surged up by 8.3 percent to an annual rate of 497,000 in June from the revised May rate of 459,000.

The report is seen as a positive sign for the house market but has also added to concerns about the outlook for the Federal Reserve's stimulus program.

Sector News

Despite the volatility being shown by the broader markets, gold stocks have seen substantial weakness for much of the session. The NYSE Arca Gold Bugs Index has tumbled by 3.3 percent after ending the previous session at its best closing level in a month.

A decrease by the price of gold is weighing on the sector, with gold for August delivery sliding $5.90 to $1,328.80 an ounce.

Railroad stocks are also seeing significant weakness in mid-day trading, dragging the Dow Jones Railroads Index down by 1.7 percent. Norfolk Southern (NSC) is leading the sector lower after reporting weaker than expected second quarter results.

Commercial real estate, utilities, and housing stocks have also come under pressure on the day, with the weakness in the housing sector coming despite the upbeat new home sales report.

Meanwhile, airline stocks have shown a strong move to the upside on the day, driving the NYSE Arca Airline Index up by 1.4 percent. Earlier in the session, the index reached its best intraday level in well over six years.

Considerable strength is also visible among biotechnology, computer hardware, and software stocks, helping to keep the Nasdaq in positive territory.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets all moved to the upside over the course of the session. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index advanced by 0.8 percent and the French CAC 40 Index jumped by 1 percent.

In the bond market, treasuries are seeing substantial weakness on the heels of the upbeat new home sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.2 basis points at 2.588 percent.