RTTNews - Stocks are retreating by notable margins in mid-morning trading on Thursday, as traders are doing some profit taking amid little change in key economic data released earlier this morning. The major averages are all in negative territory after ending the previous session slightly higher.
Before the start of trading, the Commerce Department released its second estimate of gross domestic product in the second quarter, showing that GDP decreased at an annual rate of 1.0 percent, unchanged from the 1.0 percent decrease originally reported in late July. Economists had been expecting GDP to be revised to show a decrease of 1.5 percent.
Upward revisions to exports, residential fixed investment, consumer spending, and government spending were offset by downward revisions to private inventory investment and nonresidential fixed investment.
Separately, the Labor Department revealed that the number of people filing for first-time unemployment benefits edged down to 570,000 from the previous week's revised figure of 580,000. Economists had been expecting jobless claims to slip to 565,000 from the 576,000 originally reported for the previous month.
Continuing claims, which measure the number of people receiving ongoing unemployment help, fell to 6.133 million for the week ended August 15, the most recent week for which the government has data. The closely watched continuing claims number is now at its lowest level since early April.
On the corporate front, Toll Brothers Inc. (TOL) reported a third-quarter net loss of $2.93 per share compared to a net loss of $0.18 per share in the year ago quarter. Wall Street analysts expected the company to report a loss of $1.74 per share. Revenues for the quarter totaled $461.4 million, which beat forecast of $460.2 million for the quarter.
American Eagle Outfitters (AEO) reported second quarter net income of $0.14 per share compared to $0.29 per share last year. The earnings came in line with estimates, while quarterly revenues of $657.6 million fell short of the consensus estimate of $659.56 million.
In other news, Microsoft (MSFT) announced that it would reduce the price of its high-end X-Box 360 model by as much as $100 in an effort to match the price of rival Sony (SNE), which reduced the price of its Playstation 3 by a comparable amount last week.
The major averages have moved off of their worst levels of the day in recent trading, although they remain firmly negative. The Dow is currently down 57.51 at 9,486.01, the Nasdaq is down 24.01 at 2,000.42 and the S&P 500 is down 9.03 at 1,019.09.
Most of the major sectors are moving lower, contributing to the notable pullback being shown by the equity markets in mid-morning trading.
Some of the day's most notable losses are being shown by housing stocks, with the Philadelphia Housing Sector Index sliding by 2.4 percent. The decline has dragged the index off of its best closing high in nearly eleven months.
The index is being led lower by share of Radian Group (RDN), which are down by 6 percent, backing further away from the eighteen and half month closing high set on Tuesday.
Biotechnology and airline stocks are also moving to the downside by notable margins, with the NYSE Arca Biotechnology Index and the NYSE Arca Airline Index sliding by 2.5 percent and 2.2 percent, respectively.
The biotech index is backing off of the all-time closing high it set on Wednesday, while the airline index is backing off of the seven and a half month closing high it set in the previous session.
While resource, networking and transportation stocks are also moving lower along with a variety of other sectors, defense stocks are bucking the day's downtrend. The Philadelphia Defense Index is up by 1 percent, hovering near Friday's seven and a half month closing high.
Stocks Driven By Analyst Comments
Despite the weakness in the broader markets, Olin (OLN) is on the rise in mid-morning trading after Barclays upgraded the stock to Overweight from Equal Weight. The broker also raised its target price on the stock to $22 from $11. Olin is currently up 6.2 percent, rising to a four-month intraday high.
Whirlpool (WHR) is also advancing following an upgrade by Cowen from Neutral to Outperform. The broker cited stabilizing demand and reduced costs as a reason for the ratings change. Shares of the home appliance manufacturer are up by 1 percent, hovering near Friday's ten-month closing high.
On the other hand, shares of Jackson Hewitt (JTX) are retreating after being downgraded by Oppenheimer from Outperform to Perform. The broker cited the run-up in the stock price and an expected disappointment in upcoming earnings. The stock is sliding by 5.3 percent, dropping to its lowest level in nearly a month.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Thursday. Japan's benchmark Nikkei 225 Index slid by 1.6 percent, while Hong Kong's Hang Seng Index closed down by 1 percent.
The major European markets are also moving to the downside, with the German DAX Index and the French CAC 40 Index down by 1.2 percent and 0.8 percent, respectively, while the U.K.'s FTSE 100 Index is falling by 0.4 percent.
In the bond markets, treasuries have offset the majority of their early losses and are drifting near the unchanged mark. The yield on the benchmark ten-year note is trading at 3.442 percent, essentially unchanged on the day.
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