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Stock Market Update for 01/18/2011

January 18, 2011

Stocks Showing A Lack Of Direction In Early Trading

Stocks are turning in a lackluster performance in early trading on Tuesday, with traders reluctant to make any significant moves following the long weekend. The major averages are lingering near the unchanged line after ending last Friday’s trading at multi-year closing highs.stock market update

While most of the major sectors are showing only modest moves, early strength is visible among gold stocks, which are rebounding along with the price of the precious metal. On the other hand, weakness has emerged among banking and airline stocks.

Citigroup (C) is helping to lead the banking sector lower after reporting fourth quarter earnings of $0.04 per share, short of the $0.08 per share expected on Wall Street. Revenues totaled $18.4 billion, which was below expectations for $20.45 billion.

Similarly, Delta Air Lines (DAL) is turning in one of the airline sector’s worst performances after posting adjusted fourth quarter earnings of $0.19 per share, well below forecasts for $0.26 per share. Meanwhile, sales rose to $7.79 billion, topping expectations for revenues of $7.73 billion.

Shares of Apple (AAPL) are also moving lower after CEO Steve Jobs announced that he would be taking an indefinite medical leave of absence again, raising uncertainty regarding the direction of the company.

In an email to Apple employees Monday morning, Jobs said, “At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.”

On the economic front, conditions for New York manufacturers continued to improve in January, according to a report released by the Federal Reserve Bank of New York, with the index of regional manufacturing activity rising roughly in line with economist estimates.

The New York Fed said its general business conditions index rose to 11.9 in January from a revised 9.9 in December, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 12.0 from the 10.6 originally reported for the previous month.

At 10:00 a.m. ET, the National Association of Home Builders will release the results of its January survey on homebuilder confidence. The index is forecast to remain at 16.

The major averages are currently turning in a mixed performance, with the Dow up by 15.78 points or 0.1 percent at 11,803,16, while the Nasdaq is down 4.33 points or 0.2 percent at 2,750.97 and the S&P 500 is down 2.15 points or 0.2 percent at 1,291.09.

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