RTTNews - Stocks are showing some strength in mid-afternoon trading on Thursday, as traders react to largely positive economic data. While the Dow and the S&P 500 have shown consistent gains throughout the session, the Nasdaq has been swinging between gains and losses.

Below average trading volume has prompted a lack of significant moves on the day, typical of the light summer season.

The strength in the markets is partly due to the release of a report from the Philadelphia Federal Reserve showing that the pace of contraction in the mid-Atlantic region's manufacturing sector slowed by much more than economists had been expecting in June.

Trader sentiment was further boosted by the release of the Conference Board's report on leading economic indicators for the month of May, which showed that its leading indicators index increased by a little more than economists had been anticipating.

Further, while employment data from the Labor Department showed a slight uptick in jobless claims for the week ended June 13th, continuing claims for the week of June 6th snapped 21 straight weeks of increases, mitigating some of the concern about the embattled labor market.

The major averages are currently all in positive territory, although the Nasdaq is posting a relatively modest gain. While the Nasdaq is up 1.15 at 1,809.21, the Dow is up 59.78 at 8,556.96 and the S&P 500 is up 7.16 at 917.87.

Dow Components

Most of the Dow components are posting gains in mid-afternoon dealing, helping the blue chip index to post a moderately strong gain.

Shares of Kraft (KFT) are prompting some of the upside seen in the Dow, rising by 4 percent on the session. With the advance, shares of the packaged food giant are continuing to recover from a one-month closing low reached earlier this week.

Further, financial stalwarts Bank of America (BAC) and JP Morgan (JPM) are also helping to lead the Dow higher, rising by 4.6 percent and 3.7 percent, respectively, also moving off of recent lows.

While Merck (MRK), Coca-Cola (KO), and Alcoa (AA) are also advancing, shares of General Electric (GE) and Caterpillar (CAT) are turning in disappointing performances.

General Electric has dipped by 1.7 percent, reaching its lowest intra-day level in over two months, while Caterpillar is down by 2 percent, poised to close at a seven week low.

Sector News

A majority of sectors are showing strength in mid-afternoon trading, although notable weakness in some sectors has helped to limit the upside for the broader markets.

Banking stocks have shown considerable gains on the day, as reflected by the 2.3 percent gain currently being show by the Kbw Bank Index. The day's advance has lifted the index well off the six-week closing low set in the previous session.

Healthcare provider and insurance stocks are also continuing their outstanding performance, with the Morgan Stanley Healthcare Provider Index and the Morgan Stanley Healthcare Payor Index up by 3.1 percent and 5.8 percent, respectively.

Pharmaceutical stocks are also climbing on the day, as reflected by the 1.3 percent gain being shown by the NYSE Arca Pharmaceutical Index.

The gains by healthcare-related stocks have come as some of the more radical healthcare reform proposals have failed to gain traction, reassuring some investors.

Trucking and tobacco stocks are also extending their gains on the session, helping their respective indices to bounce off multi-week lows.

Meanwhile, semiconductor and gold stocks are posting notable losses, with the Philadelphia Semiconductor Index and the NYSE Arca Gold Bugs Index slipping by 2.1 percent and 2.2 percent, respectively.

Notable weakness is also visible among housing and retail stocks. Notably, the Philadelphia Housing Index is down 1.6 percent, poised to end the session at a two-month closing low.

In Focus: Economic Data, Geithner Testimony

As mentioned above, the Philly Fed said its index of activity in the manufacturing sector rose to a negative 2.2 in June from a negative 22.6 in May, although a negative reading still indicates a contraction. Economists had been expecting a much more modest increase to a reading of negative 17.0.

Separately, a report from the Conference Board showed that its leading indicators index rose 1.2 percent in May following an upwardly revised 1.1 percent increase in April. Economists had expected the index to increase by 1.0 percent, matching the increase originally reported for the previous month.

Earlier, traders digested employment figures released by the Labor Department that showed first time claims for the week ended June 13th came in at 608,000 compared to last week's revised figure of 605,000.

Some optimism was generated by a drop in continuing claims, which fell by 148,000 in the week ended June 6th, brining the total number of people continuing to file for unemployment benefits to 6.687 million. This marked the first drop in continuing claims since the week ended January 3rd.

Meanwhile, on Capitol Hill, both Republicans and Democrats on the Senate Banking Housing and Urban Affairs Committee questioned Timothy Geithner's proposal to set up the Federal Reserve as the primary regulator of risks to the entire financial system.

Geithner responded by pointing out that central banks around the world generally have the authority to set monetary policy and to deal with the stability of financial systems.

Other Markets

In overseas trading, stock markets across the Asia Pacific region ended Thursday's trading notably lower. Japan's benchmark Nikkei 225 Index closed down 0.8 percent, while Hong Kong's Hang Seng finished down 1.7 percent.

Meanwhile, the major European markets finished the day on the upside. The French CAC 40 Index and the German DAX Index closed up by 1 percent and 0.8 percent, respectively. The U.K.'s FTSE 100 Index inched higher, finishing just above the unchanged mark.

In the bond markets, treasuries are continuing their freefall. Subsequently, the yield on the benchmark ten-year note is trading at 3.814 percent, a jump of 16.7 basis points on the day.

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