RTTNews - Following some early volatility, stocks are showing considerable strength in early afternoon trading on Thursday. The major averages have all moved firmly into positive territory, as stocks look to rebound from the losses posted in the previous three sessions.
The strength comes as traders are doing some bargain hunting despite some disappointing employment data from the Labor Department released this morning.
The Labor Department report showed that initial jobless claims in the week ended May 8th climbed to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000.
Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
A separate report from the Labor Department showed that the producer price index rose 0.3 percent in April following an unrevised 1.2 percent decrease in March. Economists had been expecting a slightly more modest increase in prices of about 0.2 percent.
At the same time, the Labor Department said that the core producer price index, which excludes volatile food and energy prices, edged up 0.1 percent in April after coming in unchanged in the previous month. The modest increase came in line with economist estimates
On the earnings front, Wal-Mart (WMT) reported first-quarter earnings that came in line with analyst estimates. Nonetheless, the retail giant is currently down 1.7 percent following the earnings report.
Meanwhile Kohl's (KSS) reported first quarter earnings and revenues that edged out analyst estimates. Subsequently, shares of the retailer are currently 1.9 percent.
In other news, Chrysler LLC has begun to restructure after filing for bankruptcy. The firm announced that it would cut 25 percent of its 3,200 dealerships, looking to replace embattled sales centers with more profitable facilities.
Elsewhere, the New York Federal Reserve continued its treasury buyback program, purchasing $2.98 billion worth of securities with maturity dates ranging from May of 2010 to February of 2011.
The day's buyback attracted considerably strong interest, with a total of $27.09 billion in treasuries submitted for the purchase. With the purchase, the government has bought back $104.69 billion in treasuries since the purchase program began on March 25th.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is currently up 71.92 at 8,356.81, the Nasdaq is up 29.17 at 1,693.36 and the S&P 500 is up 11.29 at 895.21.
Trucking stocks are posting notable gains in early afternoon driving, driving the Dow Jones Trucking Index up 3.6 percent. The gain by the index comes after it closed lower in each of the five previous sessions.
YRC Worldwide (YRCW) and Conway (CNW) are leading the trucking sector higher, rising 16 percent and 9.5 percent, respectively.
Additionally, gains by airline stocks have added to the strength in transportation sector on the day, with the Amex Airline Index climbing by 5.7 percent.
Semiconductor stocks also continue to turn in strong performances, with the Philadelphia Semiconductor Index up by 3.8 percent. With the upward move, the index is moving back to the upside after hitting a monthly low in the previous session.
Significant strength has also emerged among housing and banking stocks, with the Philadelphia Housing Sector Index and the Kbw Bank Sector Index up by 4 percent and 4.4, respectively.
On the other hand, some utilities stocks are bucking the uptrend by the broader markets, dragging the Dow Jones Utilities Average down 0.6 percent.
Stocks in the News
Shares of Jack In The Box (JACK) are rising in early afternoon trading as traders react to better than expected earnings from the restaurant operator. The firm reported earnings of $0.52 per share, edging out analyst estimates of $0.44 per share. The stock is bouncing off of a 2-month low following the earnings report, up by 10 percent on the day.
Chip manufacturer Rambus (RMBS) is also on the rise following news that the Federal Trade Commission has dropped anti-trust claims against the firm. The stock is up 12.2 percent after setting a two-week low at the close of Wednesday's session.
Meanwhile, shares of MGM Mirage (MGM) are slipping as the firm completed a $1 billion stock offering, raising concern about share dilution. The additional stock issue is part of a larger plan to raise $2.5 billion in additional capital to pay down nearly $14 billion in debt for the Las Vegas entertainment giant. Subsequently, the stock is down by 7.6 percent.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off seen on Wall Street overnight. Japan's benchmark Nikkei 225 Index showed a steep decline, closing down 2.6 percent.
Meanwhile, the major European markets moved higher over the course of the trading day. The U.K.'s FTSE 100 Index closed up 0.7 percent, while the French CAC 40 Index and the German DAX Index rose 0.1 and 0.2 percent, respectively.
In the bond market, treasuries are seeing some weakness, driving the yield on the benchmark ten-year note up 1.1 basis points to 3.116 percent.
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