Major Averages Climb Back Near Unchanged After Initial Drop - US Commentary
WASHINGTON (Alliance News) - After initially moving to the downside, stocks have regained some ground over the course of morning trading on Thursday. The major averages have climbed off their lows for the session and are now lingering near the unchanged line.
Currently, the major averages are posting modest losses. The Dow is down 13.49 points or 0.1% at 22,859.40, the Nasdaq is down 2.17 points or less than a tenth of a % at 6,601.38 and the S&P 500 is down 2.17 points or 0.1% at 2,553.07.
The initial weakness on Wall Street was partly due to profit taking after the major averages edged up to new record closing highs in the previous session.
A negative reaction to earnings news from Citigroup (C) and JPMorgan (JPM) also weighed on the markets, with both financial giants moving lower despite reporting better than expected third quarter earnings.
Nonetheless, selling pressure waned shortly after the start of trading, as traders may be worried about missing out on further upside for the markets.
On the US economic front, the Labor Department released a report showing producer prices increased in line with economist estimates in the month of September.
The Labor Department said its producer price index for final demand climbed by 0.4% in September after edging up by 0.2% in August.
Excluding food and energy prices, core producer prices still rose by 0.4% in September after inching up by 0.1% in August. Core prices had been expected to rise by 0.2%.
A separate Labor Department report showed first-time claims for unemployment benefits fell by more than anticipated in the week ended October 7th.
The report said initial jobless claims dropped to 243,000, a decrease of 15,000 from the previous week's revised level of 258,000. Economists had expected jobless claims to dip to 251,000.
Most of the major sectors are once again showing only modest moves, contributing to the lackluster performance by the broader markets.
Considerable weakness is visible among telecom stocks, however, with the NYSE Arca Telecom Index sliding by 1.6%. The index is pulling back off its best closing level in nearly two months.
AT&T (T) is leading the telecom sector lower after warning its third quarter results were negatively impacted by recent hurricanes in the US as well as earthquakes in Mexico.
Oil service stocks have also come under pressure on the day, dragging the Philadelphia Oil Service Index down by 1.4%. The weakness in the sector comes amid a notable decrease by the price of crude oil.
Meanwhile, steel and tobacco stocks are seeing some strength in morning trading, although buying interest has remained relatively subdued.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.4%, while Hong Kong's Hang Seng Index rose by 0.2%.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.1%, the UK's FTSE 100 Index and the German DAX Index are both up by 0.2%.
In the bond market, treasuries continue to show a lack of direction after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.337%.
Copyright RTT News/dpa-AFX