RTTNews - Stocks are seeing modest strength in early afternoon trading on Thursday amid some optimism on the heels of the day's encouraging employment data. The major averages are all on the upside at the moment, although the Dow has been swinging between gains and losses.

Early buying interest was prompted by data on first-time claims for unemployment benefits, which showed a substantial decrease in the week ended July 4th, according to a report released by the Labor Department.

Shortly, focus may turn to the $11.0 billion auction of thirty-year bonds by the Treasury Department, with traders looking for a continued moderation in interest rates. The results of the auction will be revealed at 1:00 p.m. ET.

After the markets close today, Dow component Chevron (CVX) is set to report its second quarter earnings. Wall Street analysts expect the oil giant to report earnings of $1.22 per share compared to $2.90 per share in the same quarter last year.

The major averages are currently all in positive territory, although the Dow is posting a relatively modest gain. The Dow is currently up 11.49 at 8,189.90, the Nasdaq is up 11.46 at 1,758.63 and the S&P 500 is up 5.38 at 884.94.

Sector News

Gold stocks are posting some of the strongest gains, with the NYSE Arca Gold Bugs Index up by 3.9 percent on the day. With the move, the index is climbing off of a two-month closing low set on Wednesday.

The gains by gold stocks come amid a rebound by the price of the precious metal, with gold for August delivery currently up $6.10 at $915.40 an ounce after trending lower in recent sessions.

Further strength in the metal sector comes amid a notable upward move by steel stocks, with the NYSE Arca Steel Index rising by 3 percent, moving off of its worst closing level in just over seven weeks.

Semiconductor stocks also continue to turn in strong performances, with the Philadelphia Semiconductor Sector Index posting a gain of 3.4 percent in the early afternoon. With the move, the index is bouncing off the nearly seven-week closing low set in the previous session.

Natural gas, banking, and oil service stocks are also advancing by significant margins. Subsequently, the NYSE Arca Natural Gas Index, the Kbw Banking Index and the Philadelphia Oil Service Sector Index are all recovering from roughly two month closing lows set this week.

On the other hand, healthcare provider and health insurance stocks have seen additional selling pressure in early afternoon trading, while pharmaceutical and tobacco stocks have also steepened their losses.

Stock In The News

Rigel Pharmaceuticals (RIGL) is surging after the firm announced that its R788 (fostamatinib disodium) drug produced significant clinical improvement in rheumatoid arthritis patients in the recently completed Phase 2b clinical trial. The stock is up by 11.6 percent, reaching its best intraday level in well over eight months earlier in the session.

Deluxe (DLX) is also climbing after raising its second quarter adjusted earnings outlook to a range of $0.54 to $0.56 per share from its previous range of $0.43 to $0.51 per share. The stock is up by 14.6 percent, soaring to nearly a three-week intra-day high.

On the other hand, FiberNet Telecom Group (FTGX) is plunging after announcing that RCN (RCNI) withdrew its proposal to acquire FiberNet for $12.50 per share. Shares are plummeting by 8.5 percent, hitting their worst intraday price in over a month earlier in the day.

In Focus: Employment Data, Alcoa Earnings, Fed Buyback

As discussed earlier, data from the Labor Department showed that jobless claims fell to 565,000 in the week ended July 4th from the previous week's revised figure of 617,000. Economists had been expecting a more modest decrease to 603,000 from the 614,000 originally reported for the previous week.

With the bigger than expected decrease, weekly jobless claims fell below the 600,000 level for the first time since January.

On the earnings front, Alcoa (AA) reported an adjusted second quarter loss of $256 million or $0.26 per share, while Wall Street expected the company to report a loss of $0.37 per share. The firm also reported quarterly revenues of $4.2 billion, edging out analyst estimates of $3.93 billion.

CEO Klaus Kleinfeld expressed hope that stimulus measures unveiled by the U.S and Chinese governments might help revive demand for the company's products.

In other news, the Federal Reserve continued its treasury buyback program Thursday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $3 billion worth of securities with maturity dates ranging from July of 2010 to April of 2011.

The day's buyback saw a total of $17.1 billion in treasuries submitted for purchase. Overall, the Fed has purchased a total of $200.72 billion since the program began on March 25th.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Thursday's session on a mixed note. Japan's benchmark Nikkei 225 Index closed down by 1.4 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent on the day.

Meanwhile, the major European markets all closed on the upside, with the German DAX Index closing up by 1.3 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index both rose by 0.5 percent.

In the bond markets, treasuries are seeing notable weakness amid some economic optimism on the heels of the day's employment data. Subsequently, the yield on the benchmark ten-year note is trading at 3.399 percent, rising by 11.0 basis points on the day.

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