RTTNews - Stocks are continuing their struggle to find direction on Thursday after a modestly higher open prompted by some encouraging employment figures. The major averages have swung between gains and losses for most of the session, attempting to hold onto thin gains in early afternoon trading.
Before the opening bell, traders were presented with employment data from the Labor Department that showed a decrease in first time jobless claims for the week ended May 30th. The report also indicated the first decrease in continuing claims in twenty weeks.
In a separate report, the Labor Department reported its revision in productivity figures for the first quarter, revealing a mild increase in the figure. The report also showed that unit labor costs increased by less than previously estimated.
While the employment data seemed to largely drive morning dealing, some traders may be staying on the sidelines ahead of tomorrow's report from the Labor Department detailing the employment situation for the month of May.
The major averages have moved to the upside in recent trading and are currently posting moderate gains. The Dow is currently up 20.46 at 8,695.74, the Nasdaq is up 6.23 at 1,832.15 and the S&P 500 is up 3.95 at 935.71.
The major sectors are mostly positive, contributing to the mild gains being shown by the major averages on the day.
Brokerage stocks are turning in some of the day's best performances, as reflected by the 3.2 percent advance by the Amex Securities Broker/Dealer Sector Index. Nomura Holdings (NMR) is helping to lead the sector higher, rising 5.2 percent to their highest intraday level in well over four months.
Raymond James Financial (RJF) is also climbing after its shares were upgraded to Market Perform from Underperform by FBR Capital. The target price on the shares was also boosted to $15 from $12. Shares of Raymond James are up by 6 percent on the day.
Banking stocks are also seeing considerable gains, with the Kbw Bank Index up by 3.5 percent, moving to the upper end of a recent trading range.
Resource stocks are also continuing to surge on the day after a pullback in the previous session, with gold, oil service and natural gas stocks all climbing on the day. The strength in the sector comes amid a rebound in commodity prices.
Meanwhile, health insurance stocks are retreating, with the Morgan Stanley Healthcare Payor Index down by 1.1 percent on the day, giving back recent gains.
Retail stocks are also weak, with the S&P Retail Index falling by 2.3 percent following notable declines in comparable store sales by the nation's leading retailers. Airline and housing stocks are also pulling back on the day.
Stocks In The News
Shares of Copart, Inc. (CPRT) are moving to the upside after the firm reported third quarter net income of $0.50 per share, edging out Wall Street expectations of $0.48 per share. Copart stock is up by 7.8 percent in afternoon trading after reaching its best intraday level in seven months earlier.
Wind River Systems Inc (WIND) is also rising sharply after the firm's board of directors approved Intel's (INTC) bid to acquire the company for $11.50 per share in cash, or approximately $884 million. Shares of Wind River are up by 43.9 percent, rising to their best intra-day level in just over nine months.
On the other hand, Rio Tinto (RTP) is slipping following an announcement that the firm may scrap the proposed $19.5 billion investment by China's state-owned Aluminum Corp. Shares of Rio Tinto are currently down 6.4 percent.
In Focus: Economic Data, Retail Sales Figures
The Labor Department said initial jobless claims fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.
The report also showed that continuing claims fell to 6.735 million in the week ended May 23rd from the preceding week's revised level of 6.750 million. The modest decrease in continuing claims breaks a recent streak of record highs and marks the first decrease since the week ended January 3rd.
In a separate report, the Labor Department revealed that productivity increased by 1.6 percent in the first quarter compared to the 0.8 percent increase that had been reported last month. Economists had been expecting the increase in productivity to be revised up to 1.2 percent.
Additionally, the data indicated that unit labor costs increased by 3.0 percent in the first three months of the year, a downward revision from the originally reported 3.3 percent increase. The increase in costs was expected to be revised down to 2.9 percent.
On the corporate front, Ciena Corp. (CIEN) reported an adjusted second quarter net loss of $22.5 million or $0.25 per common share, compared to net income of $42.3 million or $0.40 per common share in the year-ago quarter. Wall Street analysts expected the firm to report a loss of $0.09 per share.
Meanwhile, membership warehouses operator Costco Wholesale (COST) reported a 7 percent drop in its comparable sales for the four-week period ended May 31, 2009, with a 5 percent decline in net sales.
A number of other retailers have also reported their monthly sales results, with Abercrombie & Fitch (ANF), J.C. Penney (JCP), Bon-Ton (BONT) and American Apparel (APP) all reporting declining sales on a comparable store basis.
Retail giant Wal-Mart (WMT) did not release its monthly sales results, however, as the company announced last month that it would cease providing its monthly results.
In overseas trading, stock markets across the Asia-Pacific region finished modestly lower on Thursday. Japan's benchmark Nikkei 225 Index slipped by 0.8 percent, while Hong Kong's Hang Seng fell by 0.4 percent.
Meanwhile, the major European markets finished modestly higher. The U.K.'s FTSE 100 Index closed up by 0.8 percent, while the French CAC 40 Index and the German DAX Index finished up by 0.1 percent and 0.2 percent, respectively.
In the bond market, treasuries are showing notable weakness, although they are well off of their worst levels of the day. Subsequently, the yield on the benchmark ten-year note is trading at 3.640 percent, an increase of 8.9 basis points.
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