While selling pressure has remained relatively subdued, stocks are seeing some weakness in early afternoon trading on Thursday after seeing some uncertainty. The lack of direction seen earlier came as investors mulled over some mixed corporate earnings news and reports on jobless claims and existing home sales.
The weekly jobless claims report released by the Labor Department showed that first-time claims for unemployment benefits climbed roughly in line with economist estimates in the week ended April 18th. Initial jobless claims rose to 640,000 from the previous week's revised figure of 613,000.
At the same time, the Labor Department said that continuing claims in the week ended April 11th rose to another new record high of 6.14 million from the preceding week's revised level of 6.04 million.
Meanwhile, the National Association of Realtors released its report on existing home sales in the month of March, showing that the annual rate of sales fell 3.0 percent to 4.57 million. Economists had expected existing home sales to slip to a 4.65 million unit rate.
On the corporate front, Apple (AAPL) reported net income for the second quarter of $1.33 per share, compared to $1.16 per share for the year-ago quarter. Revenue for the second quarter rose to $8.16 billion from $7.51 billion in the prior year quarter.
Analysts' consensus estimates had called for Apple to earn $1.09 per share on revenue of $7.96 billion for the second quarter.
Meanwhile, UPS (UPS) reported adjusted first quarter earnings of $0.52 per share, down from $0.87 per share last year and $0.04 below analyst estimates. Revenue also dropped, falling nearly 14 percent to $10.94 billion. That also failed to meet analysts' target.
In other news, a Wall Street Journal report said that Bank of America (BAC) CEO Ken Lewis testified that he was asked by government officials not to discuss the plan to buy embattled Merrill Lynch & Co. (MER).
The report alleges that Lewis told New York Attorney General Andrew Cuomo that he was under the impression that the officials wanted him to remain quiet. Former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were allegedly concerned about the potentially devastating fallout if Bank of America did not acquire Merrill.
Specifically, Cuomo's team questioned Lewis about keeping Merrill's $15.84 billion fourth-quarter loss under wraps, violating state law. Lewis cited Paulson and Bernanke's concerns that the failure to complete the deal would impose a big risk to the financial system.
In recent trading, the major averages have moved well off their worst levels of the day, although they currently remain stuck in the red. The Dow is currently down 44.21 at 7,842.36, the Nasdaq is down 10.40 at 1,635.72 and the S&P 500 is down 3.03 at 840.52.
While some sectors have moved back to the upside in recent trading, significant weakness remains visible among semiconductor stocks. The Philadelphia Semiconductor Index is currently down 3,4 percent, partly offsetting the 4.3 percent gain it posted on Wednesday.
Xilinx (XLNX) is turning in one of the semiconductor sector's worst performances, with the chip maker currently down 8.1 percent, pulling back further off the six-month closing high set last Thursday. The loss by Xilinx comes even though the company reported better than expected earnings.
Health insurance, electronic storage, and oil service stocks also continue to post considerable losses. The Morgan Stanley Healthcare Payor Index is down 3.6 percent, while the Amex Disk Drive Index the and Philadelphia Oil Service Index are falling 3.2 percent and 2.4 percent, respectively.
At the other end of the spectrum, gold stocks continue to lead the gainers of the session, as investors respond to a considerable increase in the price of the precious metal. With gold for June delivery up $15.70 at $908.20 an ounce, the Amex Gold Bugs Index is up 5.6 percent.
Some strength is also visible among railroad and banking. The Dow Jones Railroad Index is up 2.1 percent, while the Dow Jones Banks Index is up 1.7 percent.
Stocks In The News
VMware Inc. (VMW) is suffering a loss of 20.5 percent after the company reported first quarter earnings but provided disappointing guidance. With the decline, shares of VMware have pulled back well off the seven-month closing high set in the previous session.
While VMware reported first quarter adjusted earnings of $0.25 per share compared to analyst estimates, the company also said it expects its second quarter revenues to be flat or even down compared to the same quarter a year ago.
Additionally, Synovus Financial Corp. (SNV) is down 20 percent after the company posted a first quarter loss of $0.46 per share, compared to profit of $0.24 per share a year-ago. On average, analysts expected the company to report a loss of $0.37 per share.
Meanwhile, eBay is up 9.6 percent after the company reported better than expected first quarter earnings. The online auctioneer reported adjusted first quarter earnings of $0.39 per share compared to analyst estimates of $0.34 per share.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Thursday after ending the previous session mixed. Japan's benchmark Nikkei 225 Index showed a strong upward move, closing up 1.4 percent.
Meanwhile, the major European markets have fallen below the unchanged line after some earlier uncertainty. The U.K.'s FTSE 100 Index is down 0.3 percent, while the German DAX Index and the French CAC 40 Index are falling 1.2 percent and 0.6 percent, respectively.
In the bond market, treasuries are continuing to show a lack of direction, with the yield on the benchmark 10-year note currently down less than a basis point at 2.956 percent.
For comments and feedback: contact firstname.lastname@example.org