(RTTNews) - Stocks are showing some uncertainty during mid-morning trading on Friday, as investors respond to some mixed news on the corporate front and out of Washington. The choppy trading comes as some traders are getting a head start on the long weekend.

In corporate news, PepsiCo (PEP) reported quarterly results on Thursday that included an adjusted earnings figure that rose year-over-year and came in line with expectations. The company also said that it expects moderate earnings and revenue growth for full-year 2009.

Meanwhile, Continental Airlines (CAL) is moving lower following news of a fatal plane crash outside of Buffalo, New York. A commuter airline crashed into a suburban home late Thursday night, killing 49 passengers in the aircraft and 1 person in the home.

Meanwhile, details are gradually being released surrounding President Obama’s economic stimulus plan. The details emerging from Congress are showing that the stimulus plan is likely to jolt the U.S. economy in successive waves; relieving consumers, businesses, and states, first, and then creating new jobs through increased spending on roads, utilities, and public transit.

The stimulus bill contains a $400 tax reduction for individuals and $800 for families for this year and next in order to help out consumers that are suffering financially. With the reduction in taxes, workers will see some relief from the recent economic recession.

While the writers of the bill expect the tax cuts to help consumers, many economists expect that the temporary nature of the cuts is unlikely to drive any sustained growth.

On the economic front, Reuters and the University of Michigan said their consumer sentiment index fell to a reading of 56.2 in February from a reading of 61.2 in January. Economists had been expecting a more modest decrease by the index to a reading of about 60.2.

Some traders may be looking ahead to a G-7 meeting this weekend, where the group will look for specific ways to heal the global economy, discussing things like stimulus plans and protectionism.

The major averages are currently turning in a mixed performance, lingering near the unchanged line. While the S&P 500 is currently down 0.42 at 834.77, the Dow is up 2.07 at 7,934.83 and the Nasdaq is up 0.05 at 1,541.76.

Sector News

With British bank Lloyds Banking Group (LYG) warning that its HBOS subsidiary lost about $12 billion on a pretax basis last year, banking stocks are seeing considerable weakness. Currently, the Kbw Bank Index is suffering a 2.1 percent decline on the day.

Among banking stocks, one of the worst performers is BB&T Corp. (BBT), which has fallen 4.7 percent so far and is trading at its lowest level in just over a decade.

Real estate stocks are also extending losses from the previous session, with the Morgan Stanley REIT Index posting a 1.6 percent loss.

Weakness is also being shown by gold and tobacco stocks, with the Amex Gold Bugs Index and the Amex Tobacco Index both down 1.6 percent. The weakness in the gold sector comes as the price of the precious metal suffers a loss of $8.40, trading at $940.80 an ounce.

At the other end of the spectrum, oil service stocks are turning in some of the best performances of the day as the price of crude oil climbs. With the price of crude oil up $0.62 at $34.60 a barrel, the Philadelphia Oil Service Index is up 2.3 percent on the day.

Telecom, defense, and semiconductor stocks are also seeing notable strength, with the Amex Telecommunications Index up 2.2 percent, while the Philadelphia Defense Index and the Philadelphia Semiconductor Index are posting gains of 2.7 percent and 2.1 percent, respectively.

Stocks Driven By Analyst Comments

Following a downgrade to Hold from Buy at BB&T Capital Markets, Smithfield Foods (SFD) is suffering a 4.6 percent loss on the day. With the decline, the stock has fallen to its lowest level in just under two months.

Additionally, Research In Motion (RIMM) is down 3.7 percent on the day after the stock was downgraded to Underperform from Neutral by Credit Suisse.

Analysts said they expect overall smartphone sales to decline in the slowing economy and that RIM’s market share growth will slow. The price target on the stock was also lowered to $37 from $45.

Meanwhile, Sigma Designs (SIGM) is up 7.4 percent on the day following an upgrade at Robert W. Baird to Outperform from Neutral. Furthermore, the rating agency increased the price target of the stock to $16 from $9.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, bouncing back to the upside after seeing notable weakness in the previous session. Japan’s benchmark Nikkei 225 Index closed up 1 percent.

Meanwhile, the major European markets have fallen back towards the unchanged line and are currently turning in a mixed performance. The French CAC 40 Index remains up 1 percent, while the U.K.’s FTSE 100 Index and the German DAX Index are down 0.3 percent and 0.1 percent, respectively.

In the bond market, treasuries are suffering considerable weakness after trending higher in the past few sessions. Subsequently, the yield on the benchmark ten-year note is currently up 16.4 basis points at 2.891 percent.

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Posted in Categories: Economy, Eurozone, Japan, Releases, UK, USA.

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