Stocks bounced back from early weakness and are higher midday Thursday. The major averages opened steady after the Dow Jones Industrial Average lost 171 points Wednesday and investors digested a mixed round of economic news.

Data released before the bell showed orders for durable goods orders increasing by 1.9 percent last month. Economists were looking for an increase of .5 percent. However, March numbers were revised down to -2.1 percent from -.8 percent.

Meanwhile, according to the Labor Department, filings for jobless benefits declined by 13,000 to 623,000 in the week ended May 23. Economists were expecting a decline to 628,000.

The major averages opened steady, but then suffered a setback after home sales data showed an improvement of only .3 percent in April. Separate data revealed a record 12 percent of mortgage holders were behind or in foreclosure in the first quarter.

The bearish housing data sent the Dow to a low of 8,247, but the selling never really gathered any momentum and the industrial average bounced higher by midday. At Noon ET, the industrial average is up 54 points and more than 100 points off session lows.

The CBOE Volatility Index (.VIX) hit a high of 33.32, but has since slipped back and is down .36 to 32. Approximately, 2.8 million puts and 3.4 million calls traded, a ratio of .82.

GM July 1 put is the most actively traded options contract, with more than 133K traded. The premiums are rich (53 cents) and provide little upside. The potential payoff is 47 cents if GM falls into bankruptcy and shareholder value is wiped out. GM faces a June 1 deadline.

Sprint (S) calls are active after a strategist sold 20K Aug 4 -6 call spreads, a position that was likely opened in early April when S was 23.8 percent below its current levels of $4.92 per share.

Moody's (MCO) shares are down $1.90 to $26.25 and put volume spiked Thursday morning after a hedge fund manager said AAA credit ratings are a "curse" and he is betting against MCO. 18K puts traded on Moody's so far, compared to 3,450 call options.

Bearish trading also picked up in NetSuite (N), Synopsus (SNPS), and the iShares Emerging Markets Fund (EEM). Meanwhile, bullish order flow surfaced in Enterprise Products (EPD), AES (AES), and the SPDR Homebuilders Trust (XHB).