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Stock Market Update for 03/11/2011

March 11, 2011

stock tradingStocks are turning in a lackluster performance in morning trading on Friday, as traders seem reluctant to make any significant moves following news of a massive earthquake in Japan. The major averages have been bouncing back and forth across the unchanged line.

The major averages are currently mixed, with the S&P 500 posting a modest gain. While the S&P 500 is up 0.72 points or 0.1 percent at 1,295.83, the Dow is down 12.00 points or 0.1 percent at 11,972.61 and the Nasdaq is down 4.41 points or 0.2 percent at 2,696.61.

The choppy trading comes amid news of an 8.9 magnitude earthquake that struck northeastern Japan and triggered a tsunami that has killed hundreds of people and caused extensive damage.

While the news has raised concerns about the outlook for the global economy, it has also led to a sharp drop by the price of crude oil, which hit a low below $100 a barrel earlier in the day.

Meanwhile, the markets have largely shrugged off a report from the Commerce Department showing that U.S. retail sales increased in line with economist estimates in the month of February.

Total retail sales came in at $387.1 billion in February, up 1 percent from January, precisely the increase that most economists had expected. January’s figures were revised upward from the 0.3 percent growth originally reported to a notably stronger 0.7 percent increase.

Much of the growth came in increased auto sales, with the report showing a 2.3 percent increase in sales of motor vehicle and parts. Excluding auto sales, retail sales increased by 0.7 percent, in line with the expectations of economists.

On the other hand, Reuters and the University of Michigan released a report showing that their consumer sentiment index fell to a five-month low of 68.2 in March from the final February reading of 77.5. Economists had expected the index to edge down to a reading of 76.5

Sector News

While most of the major sectors are showing only modest moves, notable strength has emerged among gold stocks. The NYSE Arca Gold Bugs Index is currently up by 1 percent after ending the previous session at its worst closing level in almost a month.

A modest increase by the price of gold is contributing to the strength in the sector, with gold for April delivery rising $1.50 to $1,414 an ounce after plummeting $17.10 to $1,412.50 an ounce on Thursday.

Other resource stocks are also regaining some ground after falling sharply in the previous session, with oil service stocks moving back to the upside despite the steep drop by the price of crude oil.

Moderate strength is also visible among housing and airline stocks, although buying interest remains subdued. On the other hand, health insurance and healthcare provider stocks are seeing some weakness in morning trading.

Stocks Driven By Analyst Comments

Despite the lackluster performance by the broader markets, shares of Vanguard Natural Resources (VNR) are turning in a strong performance in morning trading, advancing by 3.1 percent. With the gain, the oil and gas firm is bouncing off of the two-month closing low that it set in the previous session.

The gain by Vanguard comes after Robert W. Baird upgraded its rating on the company’s stock to Outperform from Neutral with a $32 price target. Robert W. Baird attributed to the upgrade to the stock’s low valuation following recent weakness.

Goodyear (GT) has also shown a notable move to the upside in morning trading, with the tire maker currently up by 3.6 percent. The gain by Goodyear comes after Morgan Stanley raised its rating on the stock to Overweight from Underweight.

On the other hand, shares of Hansen Natural (HANS) are currently down by 3.4 percent after Goldman Sachs downgraded the beverage make to Neutral from Buy. At its low for the session, Hansen was its worst intra-day level in almost two months.

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