RTTNews - After a lackluster outing in the previous session, stocks opened lower and continue to show weakness in afternoon trading on Thursday. The major averages have moved off of their worst levels of the day, but remain in firmly negative territory.
The pullback came on the heels of another uninspiring jobs report from the U.S Labor Department for the week ended May 16th, showing first time jobless claims slowed. However, continuing claims rose for yet another week, reaching a fresh record high.
Traders also digested forward looking indicators for April from the Conference Board which came in slightly better than expected, raising some economic prospects for the coming months.
Meanwhile, the Philadelphia Federal Reserve's business activity index for the first half of May came in with a smaller than expected improvement, mitigating the day's risk appetite.
With no significant news on tap for Friday and the markets closed on Monday due to the Memorial Day holiday, traders may be doing some profit taking ahead of the long weekend.
The major averages have climbed off of the day's lows in recent trading, but continue to linger in the red. The Dow is currently down by 134.45 to 8287.59, the Nasdaq is down 34.90 to 1692.94, and the S&P 500 is down by 14.57 to 888.90.
Most major sectors continue to linger in negative territory in afternoon trading, contributing to the considerable retreat by the major averages on the day.
Significant weakness has emerged in railroad stocks, with the Dow Jones Railroads Index down by 4.3 percent on the day. Notable losses continue to be visible in oil service and gas stocks prompted by the pullback in respective commodity futures on the day.
Steel stocks are also showing weakness, as reflected by the 3.7 percent retreat in the Amex Steel Index. With the decline, the index is pulling away from its best intraday level of the year posted in the previous session.
The day's losses continue to be moderated by some technology stocks, with strength visible in the Amex Disk Drive Index, which is up by 3.3 percent on the session. As the major averages have pulled off of their lows, some gold and banking stocks have begun to show signs of life heading into the afternoon.
Stocks In The News
OpenTable's common stock commenced trading on the Nasdaq on Thursday under the symbol OPEN and is currently up 33 percent. The firm, a provider of online restaurant reservation systems, priced its initial public offering of three million shares of its common stock at a higher-than-estimated price of $20 per share. The initial public offering, or IPO, is the first by a U.S. company on the Nasdaq in 2009.
Video game and entertainment software retailer GameStop Corp. (GME) reported a 13.4 percent year-over-year increase in profit for the first quarter, but provided a second quarter earnings forecast that was below consensus estimate. Following the announcement, the company's stock is trading down more than 13.9 percent, testing March lows.
In Focus: Economic Data, Earnings, Corporate News
Earlier this morning, investors were presented with a report from the U.S. Labor Department that showed initial jobless claims came in at 631,000 for the week ended May 16th. This was down 12,000 from the previous week's revised total of 643,000.
The number of people receiving ongoing unemployment help, a figure known as continuing claims, rose again in the latest statistics. Continuing claims climbed to 6.662 million - yet another record high.
Traders also digested data on forward looking economic indicators from the Conference Board which rose to 1.0 percent for April, compared to a decline of 0.3 percent in March. The data came in slightly above analyst expectations, who had forecasted a rise of 0.8 percent.
The figure was boosted by the recent rise in consumer outlook and rallies in the stock market, while being dragged down by the recent retreat in housing starts data.
Separately, the Philadelphia arm of the Federal Reserve released its business activity index for the first half of May, showing a reading of negative 22.6 compared to a negative 24.4 reported for the second half of April. The result came in worse than expected, after analysts had estimated the index to come in at a negative 18.0.
On the earnings front, tax preparation and financial management software maker Intuit Inc. (INTU) reported its third quarter results after Wednesday's close. The company reported adjusted third quarter net income of $552.3 million or $1.68 per share, which beat out Wall Street estimates of $1.61 per share.
The firm also said revenue jumped 9 percent compared to the same period last year. Shares climbed after the report, up by 9.1 percent in afternoon trading.
In corporate news, media reports said that auto and home lender GMAC LLC, which was bailed out by the government in December, is expected to receive more than $7 billion in U.S. Treasury funds to provide financing for customers of General Motors Corp. (GM) and Chrysler LLC.
Earlier today, Standard & Poor's revised its outlook on the U.K. to negative from stable, assuming that general government debt burden would reach 100 percent of GDP. The rating agency reaffirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings.
Credit analyst at S&P, David Beers said The rating could be lowered if we conclude that, following the election, the next government's fiscal consolidation plans are unlikely to put the U.K. debt burden on a secure downward trajectory over the medium term.
In overseas trading, stock markets across the Asia-Pacific region finished lower on Thursday. Japan's benchmark Nikkei 225 Index slipped by 0.8 percent and Hong Kong's Hang Seng Index fell 1.5 percent.
Meanwhile, the major European markets closed firmly on the downside. The French CAC 40 Index and the German DAX Index both fell considerably on the day, dropping by 2.6 and 2.7 percent, respectively. The U.K.'s FTSE 100 Index also finished lower, closing down by 2.7 percent.
In the bond markets, treasuries are showing considerable weakness. Subsequently, the yield on the benchmark ten-year note has soared to 3.304 percent, a jump of 10.4 basis points on the day.
For comments and feedback: contact firstname.lastname@example.org