RTTNews - After a moderately higher open, stocks have surrendered their early gains and are posting moderate losses in mid-morning trading on Thursday, despite the release of some encouraging employment data. The major averages are all in negative territory, adding to yesterday's losses.
The initial buying interest came as first-time claims for unemployment benefits showed a much bigger than expected decrease in the week ended August 1st, according to a report released by the Labor Department, with the data offsetting some of the recent concerns about the outlook for the labor market.
The report showed that initial jobless claims fell to 550,000 from the previous week's revised figure of 588,000. Economists had been expecting jobless claims to edge down to 580,000 from the 584,000 originally reported for the previous week.
On the earnings front, Cisco Systems (CSCO) reported adjusted fourth quarter net income of $0.31 per share, compared to $0.40 per share in the same quarter of last year. Wall Street analysts expected the company to report earnings of $0.29 per share.
Cisco CEO John Chambers also said the company saw a number of positive signs for the economy during the quarter.
Meanwhile, Sunoco (SUN) reported an adjusted second quarter net loss of $0.27 per share, compared to income of $0.52 per share in the year ago quarter. Revenue for the second quarter fell 51 percent to $7.51 billion from $15.18 billion in the same quarter last year.
Overall, most corporate results have beat estimates on the bottom line but have consistently fallen short of revenue forecasts due to the economic climate.
Traders are also looking to a slew of results on monthly retail sales, with Target (TGT), Big Lots (BIG), BJ's Wholesale Club (BJ), and JC Penney (JCP) among those reporting.
In recent trading, the major averages have moved off their worst levels of the day, although they remain stuck in negative territory. The Dow is currently down 25.54 at 9,255.43, the Nasdaq is down 13.21 at 1,979.84 and the S&P 500 is down 5.03 at 997.69.
Most of the major sectors have moved lower over the course of the morning, contributing to the pullback by the broader markets.
Healthcare provider stocks are turning in some of the worst performances, dragging the Morgan Stanley Healthcare Provide Index down 3.4 percent. With the loss, the index is pulling back further off the ten-month closing high set on Monday.
Sunrise Senior Living (SRZ) is helping to lead the sector lower after the senior living services provider reported a much wider second quarter loss. Shares of Sunrise are currently down 19.7 percent.
Significant weakness has also emerged among airline and biotechnology stocks, with the NYSE Arca Airline Index and the NYSE Arca Biotechnology Index dropping by 2.1 percent and 2.2 percent, respectively.
The airline index is pulling back off the roughly six-month closing high set on Wednesday, while the biotechnology index is continuing to fall away from the historic high set on Monday.
While semiconductor, health insurance and oil stocks are also moving lower, retail stocks are bucking the day's downtrend. The S&P Retail Index is currently up 1.4 percent after reaching a ten-month intraday high earlier in the session.
Stocks Driven By Analyst Comments
Despite the pullback by the broader markets, Louisiana Pacific (LPX) is surging higher in mid-morning trading after Credit Suisse upgraded the stock to Outperform from Underperform. The broker also raised its target price on the stock to $9 from $4. The stock is up by 6.2 percent, reaching a ten-month intraday high earlier in the session.
Shares of American Express (AXP) are also on the rise following an upgrade at Citigroup from Hold to Buy. The broker cited credit stabilization as a reason for the ratings change and raised the stock's target price to $36 from $28. The stock is climbing by 4.2 percent, also reaching a ten-month intraday high.
On the other hand, Cubist Pharmaceuticals (CBST) is sliding after Oppenheimer downgraded the stock to Underperform from Perform. The stock is down by 5.9 percent, moving off the six-month closing high set in the previous session.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, although the major markets in Japan and Hong Kong closed notably higher. Japan's benchmark Nikkei 225 Index rose by 1.3 percent, while Hong Kong's Hang Seng Index closed up 2 percent.
Meanwhile, the major European markets have given up the majority of their early gains but remain positive. The French CAC 40 Index and the German DAX Index are up by 0.2 percent, while the U.K.'s FTSE 100 Index is up by 0.9 percent.
In the bond markets, treasuries are seeing modest strength amid the pullback on Wall Street. Subsequently the yield on the benchmark ten-year note is trading at 3.752, posting a loss of 1.2 basis points.
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