U.S. stocks and exchange traded funds (ETFs) are mixed after investors become more optimistic about the economy on an encouraging jobless report and earnings reports.

The Labor Department announced that the number of initial jobless benefits claims fell last week to 565,000, the lowest level since January and much better than the 605,000 expected by analysts.

Some more optimism was delivered to Wall Street after aluminum maker Alcoa (AA) released earnings after the bell yesterday and beat expectations.  The aluminum maker reported higher revenues and a smaller loss than anticipated.  The news helped send the iShares Dow Jones U.S. Basic Materials (IYM) up nearly 0.6% in intraday trading; AA is 3.7%.

Earnings season continues today with 3Com (COMS) beating expectations, while Chevron (CVX) is expected to report at 5 p.m. ET. Analysts seem optimistic about the company’s forthcoming report.

The Commerce Department said that wholesale inventories fell for the ninth straight month, by 0.8%,  as businesses continued to trim stockpiles. Retailers also reported weak June sales numbers, as consumers remain wary of the condition of the economy.  Same-store sales across the board declined when compared to the previous year, an indicator that the health of the retail sector is still in question.  The news sent the Retail HOLDRs (RTH) down 0.5% in morning trading.

Problems seem to continue to emerge in the financial sector as Citigroup (C) just recently announced the departure of a key executive.  Its former CFO and current chairman of Citi Holdings, Gary Crittenden, is leaving the operation in an attempt to stabilize the firm’s operations and try to turn it back to profitability.

In the housing sector, 30-year mortgage rates fell to 5.2%, which has ignited an increase in mortgage applications.  This is a good sign, because the housing markets have to regain clout in order for the economy to turn around.

The Dow Jones Industrial Average dipped about 0.1%, and both the S&P 500 and Nasdaq gained 0.2% in morning trading.

Kevin Grewal contributed to this article.

Tags: Basic Materials, Dow Jones Industrial Average, Financial, IYM, NASDAQ, Real Estate, Retail, RTH, S&P 500, Sector ETFs