Stocks Seeing Modest Strength On Upbeat Guidance From Intel - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved modestly higher over the course of the trading day on Friday. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

The major averages are currently posting modest gains, off their highs for the session. The Dow is up 37.81 points or 0.2 percent at 16,772.00, the Nasdaq is up 11.85 points or 0.3 percent at 4,309.48 and the S&P 500 is up 4.98 points or 0.3 percent at 1,935.09.

A positive reaction to upbeat guidance from Intel (INTC) is contributing to the modest strength on Wall Street, with the semiconductor giant surging up by 7.2 percent.

After the close of trading on Thursday, Intel said it now expects second quarter revenues of $13.7 billion, plus or minus $300 million, up from its previous guidance of $13 billion, plus or minus $500 million.

For the full year, Intel said it now expects some revenue growth compared to its previous forecast for flat revenues. The company also lifted its gross margin guidance.

While the news has contributed to some strength in the tech sector, traders seem reluctant to resume buying stocks amid concerns about escalating violence in Iraq.

News that militants have seized control of significant portions of the country and are on the march toward Baghdad has raised concerns about crude oil supplies and a broader regional conflict.

On the economic front, the Labor Department released a report before the start of trading showing an unexpected decrease in U.S. producer prices in the month of May, with the drop partly reflecting a notable decrease in prices for trade services.

The Labor Department said its producer price index for final demand dipped by 0.2 percent in May after climbing by 0.6 percent in April. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices edged down by 0.1 percent in May following a 0.5 percent increase in April. Core prices had been expected to tick up by 0.1 percent.

Meanwhile, Thomson Reuters and the University of Michigan released a separate report showing an unexpected deterioration in U.S. consumer sentiment in the month of June.

The report showed that the preliminary reading on the consumer sentiment index for June came in at 81.2 compared to the final May reading of 81.9. Economists had been expecting the index to climb to 83.0.

Sector News

While a majority of the major sectors have moved to the upside on the day, most continue to show only modest moves in mid-day trading.

Computer hardware stocks have shown a strong upward move, however, with the NYSE Arca Computer Hardware Index advancing by 1.3 percent. Hewlett-Packard (HPQ) is posting a standout gain, jumping by 4 percent.

Some strength also remains visible among semiconductor stocks, with Intel leading the way higher following its upbeat guidance.

Railroad and internet stocks are also seeing some strength, while gold stocks are giving back ground after moving sharply higher over the past few sessions.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Australia's All Ordinaries Index dropped by 0.5 percent.

Meanwhile, the major European markets all moved lower on the day. While the U.K.'s FTSE 100 Index fell by 1 percent, the German DAX Index and the French CAC 40 Index dipped by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries are moving back to the downside after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2 basis points at 2.606 percent.