RTTNews - Stocks are continuing to tread largely to the upside in early afternoon trading on Thursday, as trader sentiment has improved following the release of some key economic data. The Dow and S&P 500 remain firmly in positive territory, while the Nasdaq is lagging, extending its stay just below the unchanged mark.
Despite the influx of positive economic reports, stocks are only showing relatively modest gains, slowed yet again by low trading volume.
The strength in the markets is partly due to the release of a report from the Philadelphia Federal Reserve showing that the pace of contraction in the mid-Atlantic region's manufacturing sector slowed by much more than economists had been expecting in June.
Trader sentiment was further boosted by the release of the Conference Board's report on leading economic indicators for the month of May, which showed that its leading indicators index increased by a little more than economists had been anticipating.
Further, while employment data from the Labor Department showed a slight uptick in jobless claims for the week ended June 13th, continuing claims for the week of June 6th snapped 21 straight weeks of gains, mitigating some of the concern about the embattled labor market.
Traders are also paying attention to remarks from Treasury Secretary Tim Geithner, who is defending the details of the Obama administration's proposed regulatory reforms for the financial system before the Senate Banking Committee.
While the tech-heavy Nasdaq climbed back near the unchanged line in recent trading, it currently remains stuck in the red, down 2.23 at 1,805.83. The Dow is currently up 60.39 at 8,557.57 and the S&P 500 is up 6.84 at 917.55.
Most of the major sectors continue to see strength in mid-afternoon trading, helping the Dow and the S&P 500 to extend their stay in positive territory.
Healthcare provider and insurance stocks are some of the day's strongest performers, with the Morgan Stanley Healthcare Provider Index and the Morgan Stanley Healthcare Payor Index up by 3 percent and 4.9 percent, respectively. With the gains, the indices have further offset their recent losses.
Pharmaceutical stocks are also climbing on the day, as reflected by the 1.4 percent gain being shown by the NYSE Arca Pharmaceutical Index. With the advance the index is poised to end the session at its best level in just over four months.
Banking, tobacco and trucking stocks are also seeing notable upside on the day, helping their respective indices bounce off of multi-week lows on the day.
On the other hand, a pullback by semiconductor stocks is helping to keep the tech-heavy Nasdaq in negative territory. The Philadelphia Semiconductor Index is down by 1.6 percent on the day, reflecting some of the weakness seen in technology stocks on the day.
Notably, shares of chip giant Advanced Micro Devices (AMD) are down by 4.9 percent on the day, reaching their worst intra-day level in roughly six weeks.
Additional weakness is also visible among housing and internet stocks, as evidenced by the Philadelphia Housing Sector Index and the NYSE Arca Internet Index slipping by 1.5 percent and 1 percent, respectively.
Stocks In The News
J.M. Smucker Company (SJM) is climbing in afternoon trading after the firm reported fourth-quarter net income $0.80 per share, compared to $0.67 per share in the same quarter of last year. Net revenues for the quarter were $1.07 billion, compared to $590 million in the prior year quarter.
The stock is up by 8.5 percent and rose to its best intra-day level in over eight months earlier as the earnings report crushed analyst forecasts for earnings of $0.63 per share on revenues of $997.11 million for the quarter.
Meanwhile, shares of Liz Claiborne (LIZ) are on slipping following a forecast of a wider than expected second quarter loss. Shares of the fashion giant are down by 15.4 percent, falling to a seven week low.
In Focus: Economic Data, Geithner Testimony
As mentioned above, the Philly Fed said its index of activity in the manufacturing sector rose to a negative 2.2 in June from a negative 22.6 in May, although a negative reading still indicates a contraction. Economists had been expecting a much more modest increase to a reading of negative 17.0.
Separately, a report from the Conference Board showed that its leading indicators index rose 1.2 percent in May following an upwardly revised 1.1 percent increase in April. Economists had expected the index to increase by 1.0 percent, matching the increase originally reported for the previous month.
Earlier, traders digested employment figures released by the Labor Department that showed first time claims for the week ended June 13th came in at 608,000 compared to last week's revised figure of 605,000.
Some optimism was generated by a drop in continuing claims, which fell by 148,000 in the week ended June 6th, brining the total number of people continuing to file for unemployment benefits to 6.687 million. This marked the first drop in continuing claims since the week ended January 3rd.
Meanwhile, on Capitol Hill, both Republicans and Democrats on the Senate Banking Housing and Urban Affairs Committee questioned Timothy Geithner's proposal to set up the Federal Reserve as the primary regulator of risks to the entire financial system.
Geithner responded by pointing out that central banks around the world generally have the authority to set monetary policy and to deal with the stability of financial systems.
In overseas trading, stock markets across the Asia Pacific region ended Thursday's trading notably lower. Japan's benchmark Nikkei 225 Index closed down 0.8 percent, while Hong Kong's Hang Seng finished down 1.7 percent.
Meanwhile, the major European markets finished the day on the upside. The French CAC 40 Index and the German DAX Index closed up by 1 percent and 0.8 percent, respectively. The U.K.'s FTSE 100 Index inched higher, finishing just above the unchanged mark.
In the bond markets, treasuries are plunging, falling to their worst levels of the day in recent trading. Subsequently, the yield on the benchmark ten-year note is trading at 3.808 percent, a jump of 16.1 basis points on the day.
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