RTTNews - While the markets have experienced some choppy trading, stocks are showing modest strength in mid-morning trading on Thursday. The major averages are currently all in positive territory, as stocks look to rebound from losses posted in the previous three sessions.
Although buying interest has waned since the opening bell, stocks remain mostly higher despite some worse-than-expected data from the Labor Department.
The report showed that initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month.
Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
The report showed that the producer price index rose 0.3 percent in April following an unrevised 1.2 percent decrease in March. Economists had been expecting a slightly more modest increase in prices of about 0.2 percent.
At the same time, the Labor Department said that the core producer price index, which excludes food and energy prices, edged up 0.1 percent in April after coming in unchanged in the previous month. The modest increase came in line with economist estimates.
On the earnings front, Wal-Mart (WMT) reported first-quarter earnings of $0.77 per share, compared $0.76 per share in the same quarter of last year. The earnings came in-line with expectations, which called for the firm to report earnings of $0.77 per share.
Wal-Mart said its net sales for the first quarter were $93.471 billion, a decrease of 0.6 percent from $94.042 billion in the first quarter of last year.
Other retail earnings came from Kohl's (KSS), which reported first quarter earnings of $0.45 per share compared to $0.49 per share in the same quarter of last year. Net sales for the quarter were $3.64 billion, up from $3.62 billion in the year ago quarter. Comparable store sales for the quarter decreased 4.2 percent.
The results edged out analyst estimates of earnings of $0.43 per share on revenues of $3.62 billion. Subsequently, shares of the retailer are up 3 percent.
Meanwhile, Sony (SNE) reported a fourth quarter net loss of $1.68 billion or $1.68 per share, on revenue of $15.55 billion. Sales and operating revenues dropped 22 percent. Shares of Sony have moved lower in pre-market trading following the earnings news.
After seeing some volatility in early trading, the major averages are currently hovering firmly in positive territory. The Dow is currently up 38.15 at 8,323.04, the Nasdaq is up 16.53 at 1,680.72 and the S&P 500 is up 5.16 at 889.08.
Significant strength has emerged among semiconductor stocks, with the Philadelphia Semiconductor Index rising by 2.7 percent. With the upward move, the index is moving back to the upside after hitting a monthly low in the previous session.
The sector is being led higher by shares of Novellus (NVLS), which are up by 8.2 percent, bouncing off of their lowest levels since late March. The gain by Novellus comes after Merrill/BofA upgraded its rating on the stock to Buy from Neutral.
Additional strength is visible among trucking stocks with the Dow Jones Trucking Index climbing by 1.8 percent, moving off of a three-week low. Healthcare, biotechnology and software stocks are also posting notable gains.
On the other hand, the day's gains are being limited by a dip by oil stocks, with the Amex Oil Index falling by 1.2 percent. Some weakness has also emerged among gold and natural gas stocks, as commodities prices are largely down on the day.
Stocks Driven By Analyst Comments
After trending higher, shares of CME Group (CME) are seeing some further upside in morning trading, with the futures exchange operator currently up 6.5 percent. With the gain, CME has risen to a six-month intraday high.
The gain by CME comes after JP Morgan upgraded its rating on the company's stock to Neutral from Underweight. JP Morgan said CME is well positioned to benefit from the growth in the exchange-traded market.
Shares of Johnson Controls (JCI) have also shown a strong upward move after Wachovia upgraded its rating on the auto parts maker to Outperform from Market Perform. Johnson Controls is currently up 5 percent after closing lower in the three previous sessions.
On the other hand, shares of Louisiana-Pacific (LPX) are down 1 percent after Credit Suisse downgraded its rating on the building products maker to Underperform from Neutral. Credit Suisse cited the company's recent recall announcement as well as seasonality.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off seen on Wall Street overnight. Japan's benchmark Nikkei 225 Index showed a steep decline, closing down 2.6 percent.
Meanwhile, the major European markets are currently turning in a mixed performance. While the U.K.'s FTSE 100 Index is posting a modest gain, up 0.6 percent, the French CAC 40 Index and the German DAX Index are both down 0.3 percent.
In the bond market, treasuries are seeing some weakness, although they have recently moved well off their worst levels. Subsequently, the yield on the benchmark ten-year note is currently up less than a basis point at 3.112 percent.
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