RTTNews - After a sharp pullback at the opening bell, stocks continue to show notable weakness in mid-morning trading on Thursday. The major averages are all firmly in negative territory after traders digested a batch of uninspiring employment statistics.

The early sell-off was largely prompted by the Labor Department's monthly employment report, which showed that employment fell by much more than expected in the month of June, pushing the unemployment rate up to a new twenty-five year high.

The report showed that non-farm payroll employment fell by 467,000 jobs in June following a revised decrease of 322,000 jobs in May. Economists had expected a decrease of about 365,000 jobs compared to the loss of 345,000 jobs originally reported for the previous month.

With the bigger than expected decrease in employment, the unemployment rate edged up to 9.5 percent in June from 9.4 percent in May. The increase lifted the unemployment rate to its highest level since August of 1983, although it was below economist estimates of 9.6 percent.

Separately, a report from the Commerce Department showed that orders for manufactured goods rose 1.2 percent in May following a downwardly revised 0.5 percent increase in April. Economists had expected orders to rise 0.9 percent compared to the 0.7 percent increase originally reported for the previous month.

At the same time, the Commerce Department said shipments of manufactured goods fell 0.9 percent in May, the tenth consecutive monthly decrease. This marks the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992.

On the corporate front, healthcare company Myriad Genetics (MYGN) said after the markets closed that it has successfully completed the spin-off of Myriad Pharmaceuticals (MYRX) and would now operate as two independent companies.

Meanwhile, auto-parts supplier Lear Corporation (LEA) said that it has reached an agreement with lenders to restructure its debt and said it plans to file for Chapter 11 protection soon. In addition, the company said it had obtained $500 million in bankruptcy financing.

In other news, Walgreen Co. (WAG) said that its comparable store sales for the month of June increased 3.4 percent. Net sales for the month were $5.24 billion, up 9.0 percent from $4.80 billion for the same month in 2008.

The major indices have slowed their freefall in recent trading, but they currently remain firmly entrenched in negative territory. The Dow is currently down 174.58 at 8,329.48, the Nasdaq is down 44.81 at 1,800.91 and the S&P 500 is down 20.19 at 903.14.

Sector News

Some of the day's worst performances are being turned in by resource stocks, with notable weakness visible among oil service, gold and steel stocks. The Philadelphia Oil Service Index is down by 4.3 percent on the day after hitting a two-month intraday low.

Further, the NYSE Arca Gold Bugs Index and the NYSE Arca Steel Index have dropped by 3.3 percent and 2.4 percent, respectively, although they remain stuck in their recent ranges.

The losses by resource stocks have largely been precipitated by a plunge in oil and gold prices on the NYMEX. Oil has fallen $2.34 to $66.97 a barrel, while gold has plummeted by $11.80 to $929.50 an ounce.

The NYSE Arca Biotechnology Index has also seen notable downside, falling by 2.8 percent on the day, continuing its move away from a four-month closing high set in late June.

The index is being led lower by shares of Illumina (ILMN), which have plunged by 10.7 percent after the company lowered its second quarter revenue guidance. With the decline, the stock has fallen to its worst intraday price in well over three months.

Healthcare provider, health insurance, defense and electronic storage stocks are also retreating by significant margins. Notably, the Philadelphia Defense Index has dipped by 3.4 percent, falling to its worst intraday level in over two months.

Stocks Driven By Analyst Comments

Johnson Controls (JCI) is sliding in mid-morning trading after being downgraded by Deutsche Securities from Buy to Hold. The stock is down by 8.5 percent, pulling back off of its best closing price in well over eight months.

Shares of Dynegy (DYN) are also falling following a downgrade by UBS from Neutral to Sell. Despite the 7.4 percent retreat, the stock remains within its recent one-month trading range.

On the other hand, Continental Airlines (CAL) is on the rise after being upgraded to Overweight from Equal Weight by Morgan Stanley. Even though shares of the airline giant have risen by 5.6 percent on the day, the stock continues to bounce around within a three-week trading range.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Thursday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by 0.6 percent, while Hong Kong's Hang Seng Index slipped by 1.1 percent.

The major European markets are also seeing considerable weakness, with the German DAX Index and French CAC 40 Index down by 3.2 percent and 2.8 percent, respectively. The U.K.'s FTSE 100 Index is also retreating, showing a decline of 2.4 percent.

In the bond markets, treasuries are seeing notable strength amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note is down to 3.498 percent, posting a loss of 4.6 basis points on the day.

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