RTTNews - Stocks remain mostly negative in early afternoon trading on Thursday, as the day's essentially standstill results on employment and gross domestic product have prompted some profit taking. The major averages are all in negative territory, although they have moved well off their worst levels of the day.
Ahead of the opening bell on Wall Street, the Commerce Department released its second estimate of gross domestic product in the second quarter, showing that the figure was unadjusted from the previous report.
Also on the economic front today, the Labor Department revealed that the number of people filing for first-time unemployment benefits edged down last week, although jobless claims remained at a relatively high level.
On the corporate front, Toll Brothers (TOL) reported a quarterly loss that was much wider than Wall Street estimates, although its revenues beat forecasts, while American Eagle Outfitters' (AEO) earnings came in line with estimates but its revenues fell short.
The major averages have moved further off their lows in recent trading, with the Dow climbing back near the unchanged line. The Dow is currently down 8.77 at 9,534.75, the Nasdaq is down 17.48 at 2,006.95 and the S&P 500 is down 5.29 at 1,022.83.
Notable weakness remains visible among biotechnology stocks in early afternoon trading, pushing the NYSE Arca Biotechnology Index down by 3.2 percent. With the decline, the index is backing off of the all-time closing high it set on Wednesday.
The index is being dragged down by shares of Human Genome Sciences (HGSI), which led the recent run-up with a series of stalwart gains. The stock is now retreating by 8.4 percent, pulling back off of its best closing price since early 2002.
Airline stocks are also sliding by notable margins, with the NYSE Arca Airline Index posting a 2 percent loss. With the loss, the airline index is backing off the seven and a half month closing high it set in the previous session.
Additionally, oil service and natural gas stocks are leading the way lower in the resource sector. The Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index are down by 2.1 percent and 2 percent, respectively, moving further off the multi-month highs set earlier this week.
While tobacco, commercial real estate, transportation and housing stocks are also moving notably lower, defense stocks continue to see strong gains. Additionally, some strength has emerged among electronic storage stocks, with the NYSE Arca Disk Drive Index moving into positive territory.
Stocks In The News
Sigma Designs (SIGM) is retreating in early afternoon trading after the company reported adjusted second quarter earnings that came in line with analyst estimates but forecast weaker than expected third quarter sales. The stock has plunged by 13.6 percent, setting a seven-week intraday low at its worst level of the day.
Shares of TiVo Inc. (TIVO) are also pulling back after the firm posted a second quarter net loss compared to a year ago profit. Shares are sliding by 5.6 percent and fell to a one-month intraday low in earlier trading.
On the other hand, Immunomedics (IMMU) is surging following news that its drug epratuzumab succeeded in eliciting a meaningful treatment effect in patients with systemic lupus erythematosus. The stock has shot up by 57.9 percent, rising to its best level since late 2003.
In Focus: Economic Data, Corporate News
As mentioned above, the Commerce Departed reported that GDP decreased at an annual rate of 1.0 percent, unchanged from the 1.0 percent decrease originally reported in late July. Economists had been expecting GDP to be revised to show a decrease of 1.5 percent.
Upward revisions to exports, residential fixed investment, consumer spending, and government spending were offset by downward revisions to private inventory investment and nonresidential fixed investment.
In a separate report, the Labor Department revealed that the number of people filing for first-time unemployment benefits edged down to 570,000 in the week ended August 22nd from the previous week's revised figure of 580,000. Economists had been expecting jobless claims to slip to 565,000 from the 576,000 originally reported for the previous month.
Continuing claims, which measure the number of people receiving ongoing unemployment help, fell to 6.133 million for the week ended August 15, the most recent week for which the government has data. The closely watched continuing claims number is now at its lowest level since early April.
On the earnings front, Toll Brothers reported a third-quarter net loss of $2.93 per share compared to a net loss of $0.18 per share in the year ago quarter. Wall Street analysts expected the company to report a loss of $1.74 per share. Revenues for the quarter totaled $461.4 million, which beat forecast of $460.2 million for the quarter.
American Eagle Outfitters reported second quarter net income of $0.14 per share compared to $0.29 per share last year. The earnings came in line with estimates, while quarterly revenues of $657.6 million fell short of the consensus estimate of $659.56 million.
In other news, Microsoft (MSFT) announced that it would reduce the price of its high-end X-Box 360 model by as much as $100 in an effort to match the price of rival Sony (SNE), which reduced the price of its Playstation 3 by a comparable amount last week.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Thursday. Japan's benchmark Nikkei 225 Index slid by 1.6 percent, while Hong Kong's Hang Seng Index closed down by 1 percent.
The major European markets also closed on the downside, with the German DAX Index falling by 1 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index both fell by 0.5 percent on the day.
In the bond markets, treasuries are lingering near the unchanged mark as bond traders are awaiting the results of the day's seven-year note auction. The yield on the benchmark ten-year note is trading at 3.438 percent, essentially unchanged on the day.
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