RTTNews - After stalling at the opening bell, stocks have been unable to sustain any notable moves during trading on Thursday following the day's mixed earnings and economic data. The major averages are on opposite sides of the unchanged mark by slim margins after seeing a strong run-up in the previous three sessions.
Some buying interest was generated by a report from the Labor Department showing that first time claims for unemployment benefits continued to decrease in the week ended July 11th, with initial jobless claims falling by more than economists had been expecting.
However, analysts have pointed out that seasonal issues in the auto sector have continued to impact jobless claims, skewing the data artificially lower.
Further deflating optimism was the Federal Reserve Bank of Philadelphia's report, which showed that the index of manufacturing activity in the Mid-Atlantic region fell by more than economists had been expecting.
On the earnings front, JP Morgan Chase (JPM) reported second-quarter net income that firmly beat Wall Street estimates, but Xilinx Inc. (XLNX), Cintas (CTAS), Harley Davidson (HOG), and Marriott International (MAR) offered a mixed bag of results, limiting the optimism.
After the close of trading today, traders will look to results from tech giants IBM Corp. (IBM) and Google (GOOG).
Traders are also keeping an eye on Capitol Hill, where former Treasury Secretary Henry Paulson is testifying before Congress, answering questions from lawmakers regarding the controversial Bank of America (BAC) and Merrill Lynch merger that took place late last year.
The major averages have moved sideways in recent trading, lingering near the unchanged mark. While the S&P 500 is down 0.97 at 931.71, the Dow is up 8.17 at 8,624.38 and the Nasdaq is up 4.42 at 1,867.32.
Biotechnology stocks are continuing their strong performances, with the NYSE Arca Biotechnology Index posting a gain of 3.5 percent in early afternoon trading. With the gain, the index is moving further off a roughly one-month closing low set last Wednesday.
Human Genome Sciences (HGSI) is helping to lead the sector higher, advancing 33.5 percent. The jump has taken the stock to its best intra-day price in nearly nine months.
Semiconductor, natural gas and defense stocks are also on the rise, although by more modest margins.
Meanwhile, airline stocks are pulling back by a notable margin, with the NYSE Arca Airline Index down by 1.6 percent. With the loss, the index is pulling back off the two-month closing high that it set in the previous session.
Traders are cashing in on the recent strength in the sector after the International Air Transport Association said that passenger numbers for the month of May cast doubt on the view that a bottom to the travel decline has been reached.
Further, financial stocks are being dragged down by news from CIT Group (CIT), which seems to have reached an impasse in negotiations for a bailout from the government. The commercial lender is now faced with the likely prospect of filing for bankruptcy.
Subsequently, commercial real estate, brokerage, and banking stocks are posting steep losses. The Morgan Stanley Real Estate Index is down 1.7 percent, while the NYSE Arca Securities Broker/Dealer Index and the Kbw Bank Index are both down 1.3 percent.
Stocks In The News
Nokia (NOK) is sliding in early afternoon trading after the firm reported adjusted second-quarter earnings of 0.15 euros per share compared to 0.37 euros per share in the year ago quarter. Net sales for the quarter also fell to 9.912 billion euros from 13.151 euros billion in. The stock is down by 14.4 percent, falling to its worst intra-day price in well over two months.
Shares of Marriott (MAR) are also retreating after the firm reported adjusted second quarter earnings that beat analyst estimates but provided third quarter guidance well short of expectations. Shares of the hotel giant are down by 8.5 percent after trending higher in recent sessions.
On the other hand, Polycom (PLCM) is on the rise after reporting adjusted second quarter earnings of $0.29 per share, edging out analyst estimates of $0.28 per share. The stock has soared by 8.3 percent, rising to its best intraday level in over nine months.
In Focus: Economic, Earnings News
As mentioned above, the Philly Fed said its index of current activity fell to a negative 7.5 in July from a negative 2.2 in June, with a negative reading indicating a contraction in the sector. The index had been expected to slip to a reading of negative 4.8.
A separate report from the Labor Department showed that jobless claims fell to 522,000 from the previous week's revised figure of 569,000. Economists had been expecting jobless claims to fall to about 530,000 from the 565,000 originally reported for the previous week.
Earnings news was spearheaded by JP Morgan Chase, which reported second-quarter net income of $0.28 per share, compared with $0.53 in the second quarter of 2008. The results crushed Wall Street estimates, which forecast earnings of $0.04 per share.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Thursday, with Hong Kong's Hang Seng Index climbing by 0.6 percent and Japan's benchmark Nikkei 225 Index closing up by 0.8 percent.
The major European markets also closed on the upside by moderate margins, with the German DAX Index and the French CAC 40 Index closing up by 0.6 and 0.9 percent, respectively. The U.K.'s FTSE 100 Index also rose on the day, posting a gain of 0.4 percent.
In the bond markets, treasuries are seeing notable strength amid the uncertainty on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.524 percent, posting a loss of 7.2 basis points on the day.
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