RTTNews - Stocks are seeing choppy movement in early afternoon trading on Thursday but are holding onto modest gains despite the day's disappointing economic data. The major averages are in positive territory but remain unable to sustain notable moves.
First-time claims for unemployment benefits showed a modest increase in the week ended August 8th, according to the Labor Department, with the headline figure surprising economists who had expected a modest decrease. Nonetheless, jobless claims remain well off the peaks seen during the spring months.
Separately, a report from the Commerce Department said that retail sales unexpectedly fell last month. The government's cash for clunkers program gave a boost to auto sales, but many other sectors saw declines. The figures pointed to continued weakness among consumers, who continue to hold back spending in the face of an uncertain economic environment.
Another report from Commerce Department revealed that business inventories fell by more than expected in the month of June, although the report also showed a notable increase in business sales during the month.
The major averages have moved roughly sideways since backing off of their highs in mid-morning trading. The Dow is currently up 18.36 at 9,379.97, the Nasdaq is up 8.17 at 2,006.89 and the S&P 500 is up 4.05 at 1,009.86.
The major sectors are largely positive in early afternoon trading, contributing to the modest gains by the major averages.
Networking stocks are continuing to show strength, with the NYSE Arca Networking Index rising by 3.5 percent. With the climb, the index reached an eleven month intraday high earlier in the session.
The index is being bolstered by the performance of Harris Corp (HRS), which has surged up by 16.4 percent after reporting better than expected adjusted quarterly earnings and raising its guidance. The jump elevated the stock to its best intraday price in over five months in earlier trading.
Gold and banking stocks are also turning in strong performances, with the NYSE Arca Gold Bugs Index and the Kbw Bank Index rising by 3.4 percent and 2.8 percent, respectively. Despite the upward move, the indices remain stuck in recent trading ranges.
While oil service, steel, and airline stocks are also moving higher, modest weakness is visible among utility stocks. The Philadelphia Utility Sector is down by 0.5 percent, but it remains stuck in a recent range.
Stocks In The News:
Charming Shoppes (CHRS) is on the rise in early afternoon trading after the company reached an agreement to sell its credit card receivables program to Alliance Data Systems (ADS) for $140 million in an effort to reduce debt. The stock has jumped by 7.9 percent, climbing to its best intraday price in over ten months.
Dr Pepper Snapple Group (DPS) is also advancing after the company reported adjusted second quarter net income of $0.62 per share, firmly beating Wall Street estimates of $0.49 per share. The stock is up by 4.8 percent, reaching its best intraday price in ten months earlier in the session.
Meanwhile, LDK Solar (LDK) is plunging after posting a second quarter loss of $216.9 million or $2.03 per share, falling well short of the expected loss of $0.91 per share for the quarter. The stock has plummeted by 18.4 percent, falling to its worst intraday level in roughly a month.
In Focus: Economic Data, Earnings News
As mentioned above, the Labor Department's weekly jobs report showed that initial jobless claims edged up to 558,000 from the previous week's revised figured of 554,000. Economists had been expecting claims to slip to 545,000 from the 550,000 originally reported for the previous week.
In a separate report, the Commerce Department said retail sales fell 0.1 percent in July. This followed a revised 0.8 percent increase in the previous month. The figure surprised economists, who had expected sales to increase by 0.8 percent.
Additional data from the Commerce Department showed that business inventories fell 1.1 percent in June followed a revised 1.2 percent decrease in May. Economists had been expecting inventories to fall by 0.9 percent compared to the 1.0 percent decrease originally reported for the previous month.
Nonetheless, some positive sentiment has been generated by better than expected second quarter earnings from Wal-Mart (WMT), which reported earnings for the quarter of $0.87 per share compared to analyst estimates of $0.86 per share.
Advance Auto Parts Inc. (AAP) said that its second quarter profit rose 7 percent from last year, helped by 4.8 percent same-store sales growth. Both earnings and revenues beat analyst estimates.
The world's largest brewer Anheuser Busch InBev (ABI) reported a higher net profit for the second quarter that came in above analysts' estimates. However, the brewer warned that the second half of the year would be challenging.
In overseas trading, stock markets across the Asia-Pacific region finished higher on Thursday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 2.1 percent.
The major European markets also closed on the upside, with the German DAX Index and the U.K.'s FTSE 100 Index posting gains of 1 percent and 0.8 percent, respectively, while the French CAC 40 Index rose by 0.5 percent.
In the bond market, treasuries have moved off of their best levels of the day amid the uptick on Wall Street, but they remain positive. Subsequently, the yield on the benchmark ten-year note is trading at 3.681 percent, posting a loss of 2.0 basis points on the day.
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