RTTNews - After failing to sustain an early upward move, stocks have shown a lack of direction over the course of morning trading on Thursday. The major averages are on opposite sides of the unchanged line, experiencing another lackluster session.
The early optimism came as first-time claims for unemployment benefits showed a substantial decrease in the week ended July 4th, according to a report released by the Labor Department.
The report showed that jobless claims fell to 565,000 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.
However, the report also showed that continuing claims, which measure the number of people continuing to claim unemployment benefits, rose to 6.883 million in the week ended June 27th. The increase lifted continuing claims to a new record high.
Traders largely shrugged off May wholesale trade data from the Commerce Department, which showed that wholesale inventories fell by less than economists had been expecting. The report also showed a modest increase in wholesale sales.
Traders are also looking to fresh earnings figures, with Dow component Alcoa (AA) unofficially kicking off the start of the earnings season after the closing bell yesterday. The aluminum producer reported a net loss that was narrower than Wall Street analysts had been expecting.
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.
Later on today, focus may turn to the $11.0 billion auction of thirty-year bonds by the Treasury Department, with traders looking for continued moderation in interest rates. The results of the auction will be revealed at 1:00 p.m. ET.
The major averages have swung between gains and losses and are currently turning in a mixed performance. While the Dow is currently down 4.46 a 8,173.95, the Nasdaq is up 4.83 at 1,752.00 and the S&P 500 is up 2.42 at 881.98.
Despite the choppy trading by the broader markets, semiconductor stocks are turning in strong performances, with the Philadelphia Semiconductor Sector Index up 2.6 percent. With the move, the index is bouncing off the nearly seven-week closing low set in the previous session.
Metal stocks are also recovering following a recent pullback, with steel and gold stocks rising by considerable margins. Subsequently, the NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index are up by 2.3 percent and 2 percent, respectively, moving off of roughly two-month closing lows set in the previous session.
Significant strength is also visible in several other sectors, with natural gas, housing, banking, and oil stocks posting notable gains. The strength among oil stocks comes as oil futures have shown signs of life following six straight sessions of losses.
Meanwhile, healthcare provider and health insurance stocks have come under selling pressure, offsetting some of their recent gains. The Morgan Stanley Healthcare Provider Index and the Morgan Stanley Healthcare Payor Index are both down by 1 percent.
Stocks Driven By Analyst Comments
KB Home (KBH) is rising in mid-morning trading after Credit Suisse upgraded the stock from Neutral to Outperform. Shares of the homebuilder are up by 8.2 percent, bouncing off of their worst closing price in well over three months set in the previous session.
Western Union (WU) is also moving to the upside following an upgrade by Credit Suisse from Neutral to Outperform. The stock is up by 5.8 percent, continuing its move away from its worst closing level in over two months.
On the other hand, Corporate Executive Board (EXBD) is falling after the stock was downgraded to Underperform from Neutral at Robert W. Baird, which also reduced its target price on the stock to $14 from $17. The stock has dipped by 9.7 percent on the day, falling to a six-week intraday low earlier in the session.
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 are seeing moderate gains, with the German DAX Index and the French CAC 40 Index up by 1.4 percent and 0.6 percent, respectively. The U.K.'s FTSE 100 Index is also on the rise, posting a gain of 0.7 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 3.369 percent, rising by 8.0 basis points on the day.
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