RTTNews - After a lackluster outing in the previous session, stocks opened lower and are extending their losses in mid-morning trading on Thursday. The major averages are all firmly in negative territory as traders reacted to largely negative economic data.
Traders are digesting 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 on 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.
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.
The major averages are lingering in negative territory, testing their worst levels of the day in recent trading. The Dow is currently down by 157.07 to 8264.97, the Nasdaq is down 34.76 to 1693.08, and the S&P 500 is down by 17.86 to 885.61.
Most sectors are in negative territory in mid-morning trading, contributing to the considerable pullback seen by the major averages on the day.
Oil service stocks are turning in one of the worst performances of the day, with the Philadelphia Oil Services Sector Index down by 5.3 percent on the day. The move has come as the price of crude oil futures has dipped in commodities trading on the NYMEX.
Weakness has also emerged in steel and gas stocks, with the Amex Steel Index and the Amex Natural Gas Index falling by 5.2 and 4.3 percent, respectively.
The day's losses are being mitigated by some technology stocks, with strength visible in the Amex Disk Drive Index, which is up by 2.8 percent on the session.
Notably, shares of Data Domain (DDUP) are skyrocketing, up by 34.0 percent on the day. The stock has added to its recent gains and soared to its best level of the year and its highest since June of last year.
The move came following news that the firm will be acquired by NetApp Inc. (NTAP).
Stocks Driven By Analyst Comments
Shares of Tellabs (TLAB) are down in mid-morning trading following a downgrade by Barclays from Overweight to Equal-Weight. The stock is currently down by 4.9 percent, giving back gains posted in the previous two sessions.
On the other hand, CME Group (CME) are climbing in early trading after being upgraded at Goldman Sachs to a Buy rating from a Neutral rating. The firm is also speculated to benefit from some upcoming regulatory changes in over-the-counter derivatives trading by the Obama administration. The stock is up by 1.6 percent, lingering near its highest level of the year, posted earlier this week.
In Focus: Earnings, Corporate News
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 8.60 percent in early trading following the report.
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 are on the downside. The French CAC 40 Index and the German DAX Index are both down by 2.8 percent. The U.K.'s FTSE 100 Index is also down, slipping by 2.9 percent.
In the bond markets, treasuries are showing moderate strength amid the selloff on Wall Street. Subsequently, the yield on the benchmark ten-year note is down to 3.182 percent, a fall of 2.0 basis points on the day.
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