RTTNews - After moving modestly higher at the open, stocks are showing a lack of conviction in mid-morning trading on Thursday. The major averages have bounced back and forth across the unchanged line, as traders remain uncertain about the near-term economic prospects.
Earlier, traders digested a report released by the Labor Department that showed that first time claims for unemployment benefits decreased in the week ended May 30th. The report also indicated the first decrease in continuing claims in twenty weeks.
Initial jobless claims fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.
The report also showed that continuing claims fell to 6.735 million in the week ended May 23rd from the preceding week's revised level of 6.750 million. The modest decrease in continuing claims breaks a recent streak of record highs and marks the first decrease since the week ended January 3rd.
In a separate report, the Labor Department revealed that productivity increased by 1.6 percent in the first quarter compared to the 0.8 percent increase that had been reported last month. Economists had been expecting the increase in productivity to be revised up to 1.2 percent.
Additionally, the data indicated that unit labor costs increased by 3.0 percent in the first three months of the year, a downward revision from the originally reported 3.3 percent increase. The increase in costs was expected to be revised down to 2.9 percent.
On the corporate front, Ciena Corp. (CIEN) reported an adjusted second quarter net loss of $22.5 million or $0.25 per common share, compared to net income of $42.3 million or $0.40 per common share in the year-ago quarter. Wall Street analysts expected the firm to report a loss of $0.09 per share.
Meanwhile, membership warehouses operator Costco Wholesale (COST) reported a 7 percent drop in its comparable sales for the four-week period ended May 31, 2009, with a 5 percent decline in net sales.
A number of other retails have also reported their monthly sales results, with Abercrombie & Fitch (ANF), J.C. Penney (JCP), Bon-Ton (BONT) and American Apparel (APP) all reporting declining sales on a comparable store basis.
Retail giant Wal-Mart (WMT) did not release its monthly sales results, however, as the company announced last month that it would ceases providing its monthly results.
The major averages have moved to the upside in recent trading and are currently posting modest gains. The Dow is currently up 20.46 at 8,695.74, the Nasdaq is up 6.23 at 1,832.15 and the S&P 500 is up 3.95 at 935.71.
The major sectors are mostly positive, contributing to the mild gains being shown by the major averages on the day.
Resource stocks are resuming their upward move after a pullback in the previous session, with gold, oil service and natural gas stocks all climbing on the day. Specifically, the Amex Gold Bugs Index and the Philadelphia Oil Service Sector are up by 2.6 percent and 2.1 percent, respectively.
Banking stocks are also seeing some upside, with the Kbw Bank Index up by 2.7 percent, looking to move to the upper end of a recent trading range.
On the other hand, retail stocks are treading on the downside, with the S&P Retail Index falling by 2.3 percent. Shares of Abercrombie and Fitch are dragging the index lower, showing a 10.5 percent decline and moving further off of the seven-month closing high set on Monday.
The weakness in the retail sector has come on the heels of notable declines in comparable store sales by the nation's leading retailers.
Airline, healthcare insurance and housing stocks are also retreating on the day. The weakness in the airline sector comes as oil prices have risen by nearly $2 a barrel on the day.
Stocks Driven By Analyst Comments
Shares of KeyCorp (KEY) are rising following an upgrade at RBC Capital Markets from Sector Perform to Top Pick. KeyCorp is up by 10.7 percent on the session, moving off of a multi-decade low set Wednesday.
Raymond James Financial (RJF) is also climbing after its shares were upgraded to Market Perform from Underperform by FBR Capital. The target price on the shares was also boosted to $15 from $12. Shares of Raymond James are up by 7.1 percent on the day.
On the other hand, NYSE Euronext (NYX) is struggling following a downgrade to Underperform from Market Perform by BMO Capital Markets. With the 2.9 percent pullback, the stock is extending its recent losses, pulling back further off its best closing level in over seven months.
In overseas trading, stock markets across the Asia-Pacific region finished modestly lower on Thursday. Japan's benchmark Nikkei 225 Index slipped by 0.8 percent, while Hong Kong's Hang Seng fell by 0.4 percent.
Meanwhile, the major European markets are mixed. The U.K.'s FTSE 100 Index is down by less than 0.1 percent, while the French CAC 40 Index and the German DAX Index are up by 0.4 percent and 0.2 percent, respectively.
In the bond market, treasuries are showing notable weakness. Subsequently, the yield on the benchmark ten-year note is trading at 3.648 percent, an increase of 9.7 basis points.
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