RTTNews - Following a strong move to the upside after the opening bell, stocks are attempting to hold onto strong gains in early afternoon trading on Thursday. The major averages are all in positive territory by substantial margins, although they have moved off of their best levels of the day.
The initial strength in the markets came as traders reacted positively to the latest earnings and economic data, including the Labor Department's report on first-time claims for unemployment benefits in the week ended July 25th
While the Labor Department said jobless claims came in above the average analyst estimate, there were some concerns that claims could have come in substantially higher. Further, the four-week moving average fell for the fifth straight week, dropping to its lowest level since January.
Traders also looked to a slew of earnings reports with Visa Inc. (V) reporting adjusted earnings and revenues that beat estimates. Meanwhile, Cigna (CI), Tyco (TYC), Kellogg (K) and Master Card (MA), also surpassed Wall Street expectations on the bottom line, although revenues largely missed the mark.
Exxon Mobil (XOM) fell well short of earnings forecasts although revenues beat expectations, while Travelers (TRV) results came in roughly in line with analyst consensus.
The recent move off their highs comes ahead of the release of the results of the Treasury Department's auction of $28.0 billion worth of seven year notes, with increasing government deficits and supply in the bond markets troubling investors.
The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is currently up 142.46 at 9,213.18, the Nasdaq is up 23.41 at 1,991.17 and the S&P 500 is up 16.03 at 991.18.
Resource stocks are continuing their surge in early afternoon trading, led by steel stocks. The NYSE Arca Steel Index is up by 4.5 percent, continuing to offset some of its recent losses. A rebound by commodities prices is contributing to the strength among resource stocks.
Further, chemical stocks are also posting strong gains, as reflected by the 3.7 percent advance being shown by the S&P Chemical Index. With the advance, the index has climbed to its best intraday level in well over nine months.
Dow Chemical (DOW) is leading the sector higher, surging up 7.4 percent after reporting adjusted earnings while analysts expected a loss. At its high for the session, the chemical giant was at its best intraday price in well over eight months.
Defense, financial, electronic storage and retail stocks are also moving sharply higher, reflecting the day's strength in a wide array of market segments. On the other hand, modest weakness has emerged among biotechnology and airline stocks.
Stocks In The News
Shares of Goodyear Tire & Rubber Co. (GT) are soaring in early afternoon trading after the firm reported an adjusted second quarter loss that was narrower than analysts had expected. The stock has surged up by 13.2 percent, rising to its best intraday price in ten months.
Motorola (MOT) is also moving higher after the firm reported second quarter earnings of $0.01 per share compared to analyst estimates of a loss of $0.04 per share. The stock is up by 7.3 percent, also reaching a ten-month intraday high earlier in the session.
On the other hand, shares of Akamai Technologies (AKAM) are plunging after the company's second quarter earnings of $0.40 per share fell short of the consensus estimate of $0.41 per share. The stock is plummeting by 20.2 percent, dropping to its worst intraday level in over four months.
In Focus: Employment Data, Earnings News
After the markets closed Wednesday, credit card giant Visa said its third quarter profit soared compared to last year, helped by lower expenses and a one-time gain from the sale of its stake in VisaNet do Brasil.
Visa's adjusted earnings came in above analysts' expectations along with its quarterly revenues. The company also reaffirmed its long-term guidance for 2010.
Meanwhile, Exxon Mobil reported adjusted second quarter earnings of $0.84 per share compared to $2.27 per share in the same quarter a year ago. The results came in well below analyst estimates of $1.01 per share. Quarterly revenues plummeted to $74.5 billion compared to $138 billion in the year-ago quarter but exceeded expectations of $71.3 billion.
Insurance stalwart Travelers reported second quarter net income of $1.27 per share, compared to $1.54 per share in the year ago quarter. Revenues for the quarter were $6.16 billion, down from $6.3 billion in the year ago quarter.
Wall Street analysts expected Travelers to report earnings of $1.28 per share on revenues of $6.17 billion. Although the firm raised its full year guidance, its still fell well short of estimates.
In overseas trading, stock markets across the Asia-Pacific region finished largely on the upside on Thursday. Hong Kong's Hang Seng Index and Japan's benchmark Nikkei 225 Index both rose by 0.5 percent.
The major European markets also closed notably higher, with the French CAC 40 Index and the German DAX Index finishing up by 1.7 percent and 2.1 percent, respectively, while the U.K.'s FTSE 100 Index rose by 1.9 percent.
In the bond markets, treasuries are in a holding pattern ahead of the release of the results of the seven-year note auction. Subsequently, the yield on the benchmark ten-year note is trading at 3.7 percent, posting a gain of 3.6 basis points on the day.
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