RTTNews - Stocks are showing a lack of conviction in mid-morning trading on Thursday after ceding early gains as traders delved into a series of disappointing economic reports. The major averages are mixed at the moment, unable to sustain any significant moves on the day.

First-time claims for unemployment benefits showed a modest increase in the week ended August 8th, surprising economists who had expected a modest decrease. Nonetheless, jobless claims remain well off the peaks seen in the spring.

The Labor Department's weekly jobs report showed that initial jobless claims edged up to 558,000 from the previous week's revised figured of 554,000. Economists had been expecting claims to slip to 545,000 from the 550,000 originally reported for the previous week.

Separately, the Commerce Department said retail sales fell 0.1 percent in July. This followed a revised 0.8 percent increase in the previous month. The figure surprised economists, who had expected sales to increase by 0.8 percent.

Excluding the auto sector, which received a boost from the government's popular cash for clunkers program, retail sales dropped by 0.6 percent. Economists were looking for a 0.1 percent increase in sales excluding autos.

In another report, the Commerce Department revealed that business inventories fell by more than expected in the month of June, although the report also showed a notable increase in business sales during the month.

Nonetheless, some positive sentiment has been generated by better than expected second quarter earnings from Wal-Mart (WMT), which reported earnings for the quarter of $0.87 per share compared to analyst estimates of $0.86 per share.

In other earnings news, communications and information technology company Harris Corp. (HRS) reported a fourth quarter net loss versus a year ago profit but reported adjusted earnings of $0.91 per share compared to analyst estimates of $0.81 per share. Harris also raised its profit guidance for its next fiscal year.

The major averages have seen modest upside in recent dealing, with the Nasdaq and S&P moving into positive territory. While the Dow currently remains down 12.77 at 9,348.84, the Nasdaq is up 1.66 at 2,000.38 and the S&P 500 is up 0.47 at 1,006.28.

Sector News

The major sectors are roughly split, contributing to lackluster performance by the broader markets in mid-morning trading.

Some retail stocks are retreating by notable gains, with the S&P Retail Index falling by 0.6 percent. The index is being led lower by shares of J.C. Penney (JCP), which have slipped by 1.9 percent, pulling back further off Friday's ten-month closing high.

Additionally, housing stocks are also pulling back, as reflected by the 0.7 percent loss being shown by the Philadelphia Housing Sector Index. With the slide, the index is offsetting some of yesterday's strong gain and remains stuck in a recent trading range.

Meanwhile, gold and networking stocks are turning in strong performances, with the NYSE Arca Gold Bugs Index and the NYSE Arca Networking Index rising by 3.1 percent and 3.2 percent, respectively. While the gold index is moving within a recent trading range, the networking index reached an eleven month intraday high earlier in the session.

Banking and steel stocks are also on the rise, along with oil service and telecommunications stocks, which are posting more modest gains.

Stocks Driven By Analyst Comments

Shares of Tellabs (TLAB) are rising in mid-morning trading after the stock was upgraded by Morgan Keegan from Market Perform to Outperform. The stock is up by 7.2 percent, climbing to its best intraday price in over a year.

Interpublic (IPG) is also gaining following an upgrade to Buy from Hold at Deutsche Bank. The broker forecast a profit margin recovery for the company as the economy comes back to life. The stock has jumped by 10.7 percent.

On the other hand, shares of DR Horton (DHI) are sliding after the stock was downgraded to sell from hold, largely based on a valuation call at Citigroup. Shares of the homebuilder are down by 3.3 percent, but it continues to hover near the ten-month closing high set on Friday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished higher on Thursday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 2.1 percent.

The major European markets are also moving higher, with the German DAX Index and the U.K.'s FTSE 100 Index both advancing by 0.6 percent and 0.7 percent, respectively, while the French CAC 40 Index is up by 0.3 percent.

In the bond market, treasuries are seeing notable gains amid the uncertainty on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.657 percent, posting a loss of 4.4 basis points on the day.

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