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Stocks Little Changed In Mid-Morning Trading

Stocks have given up the majority of their earlier gains and are little changed in mid-morning trading on Wednesday. The lack of conviction in the markets comes even as data points on both private sector employment and service sector activity surprised to the upside.

A short time ago, the Institute for Supply Management said service sector activity unexpectedly expanded at a faster pace in the month of July.

The ISM revealed that its non-manufacturing index rose to 54.3 in July from 53.8 in June, with a reading above 50 indicating continued growth in the service sector. Economists had been expecting the index to edge down to a reading of 53.0.

Earlier, payroll processor Automatic Data Processing, Inc. (ADP) said that non-farm private employment increased by 42,000 jobs in July following an upwardly revised increase of 19,000 jobs in June.

Economists had expected an increase of about 25,000 jobs compared to the addition of 13,000 jobs that had been reported for the previous month. With the increase, private sector employment rose for the sixth consecutive month.

In earnings news, PulteGroup Inc. (PHM) reported second-quarter net income of $0.20 per share, while analysts expected the company to report a loss of $0.01 per share. Total revenues for the quarter surged up to $1.31 billion from $678.58 million in the prior year quarter.

Media and entertainment giant Time Warner Inc. (TWX) said its second-quarter earnings rose to $0.49 per share, topping forecasts for $0.45 per share for the period. Revenues for the quarter grew 8 percent to $6.4 billion, while analysts expected revenues of $6.20 billion.

Additionally, Japanese automaker Toyota Motor Corp. (TM) said it swung to a profit in the first quarter compared to a loss in the same period last year, helped by 27 percent revenue growth on the strength of Asian sales and demand-stimulus programs in Japan.

After the markets closed for trading in the previous session, Anadarko Petroleum Corp. (APC) reported a narrower net loss for the second quarter, helped by increases in production and the average selling price. On adjusted basis, earnings were well ahead of the analysts' expectations.

In other corporate news, BP Plc (BP) has garnered some attention after revealing that its well in the Gulf of Mexico is in a static phase and appears to be on pace to be permanently sealed.

The major averages have seen choppy movement in recent dealing and are currently turning in a mixed performance. While the Dow is up 0.71 points at 2,284.23, the Dow is down 2.72 points at 10,633.66 and the S&P 500 is down 0.44 points at 1,120.02.

Gold stocks are among the morning's best performers, with the NYSE Arca Gold Bugs Index up by 1.7 percent. The upside in gold stocks comes amid a notable increase by the price of the precious metal, with gold currently up $14.30 at $1,201.80 an ounce.

Health insurance stocks are also moving higher on the day, with the Morgan Stanley Healthcare Payor Index up by 2.1 percent. The upward move has lifted the index to a fresh six-week intraday high.

While healthcare provider and biotechnology stocks are also posting notable gains, weakness has emerged among wireless, airline and semiconductors stocks.

Stocks Driven By Analyst Comments

Texas Capital Bancshares(TCBI) is trading higher after being upgraded at Credit Suisse to Outperform from Neutral. The broker cited share valuation as a reason for the ratings change. The stock has gained 2.3 percent, reaching its best intraday price in nearly three weeks.

Meanwhile, Navistar (NAV) is moving lower after being downgraded from Neutral to Underweight by analysts at JP Morgan Chase based on a forecast for a decline in market share. Shares are currently down by 2.7 percent, slipping to a one-month intraday low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended on a mixed note. Japan's benchmark Nikkei 225 inched sank by 2.1 percent, while Hong Kong's Hang Seng Index gained 0.4 percent.

Meanwhile, the major European markets are on the upside. The German DAX Index is up by 0.8 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.1 percent.

In the bond markets, treasuries are little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.923 percent, posting a gain of less than one basis point.