Stocks have moved mostly lower in morning trading on Thursday, giving back ground following the modest strength seen in the previous session. The major averages have slid firmly into negative territory on the day.
Currently, the major averages are off their lows of the session but stuck in the red. The Dow is down 101.04 points or 0.4 percent at 25,098.25, the Nasdaq is down 36.08 points or 0.5 percent at 7,818.36 and the S&P 500 is down 11.61 points or 0.4 percent at 2,804.01.
The pullback by stocks on Wall Street is partly due to profit taking following the uptrend trend seen over the past several sessions.
Recent strength in the markets lifted the Nasdaq to a record closing high on Tuesday, while the S&P 500 ended the previous session at its best closing level in over five months. The Dow also reached a monthly closing high.
A negative reaction to earnings news from several big-name companies is also weighing on the markets in morning trading.
Shares of eBay (EBAY) are moving sharply lower after the e-commerce giant reported better than expected second quarter earnings but provided disappointing full-year guidance.
Insurance giant Travelers (TRV) has also come under pressure after reporting second quarter earnings below analyst estimates.
Shares of American Express (AXP) have also moved to the downside after the credit card giant reported second quarter earnings that beat expectations but on weaker than expected revenues.
On the other hand, shares of IBM Corp. (IBM) have jumped after the tech giant reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Traders have largely shrugged off a report from the Labor Department showing initial jobless claims unexpected dropped to their lowest level in almost five decades in the week ended July 14th.
The Labor Department said initial jobless claims fell to 207,000, a decrease of 8,000 from the previous week’s revised level of 215,000. Economists had expected jobless claims to inch up to 220,000.
With the unexpected decrease, jobless claims dropped to their lowest level since hitting 202,000 in December of 1969.
A separate report from the Conference Board also showed a slightly bigger than expected increase by its index of leading U.S. economic indicators in the month of June.
Steel stocks are seeing significant weakness in morning trading, giving back ground after moving sharply higher over the two previous sessions. Reflecting the weakness in the sector, the NYSE Arca Steel Index is down by 2.2 percent.
Considerable weakness has also emerged among tobacco stocks, as reflected by the 1.7 percent drop by the NYSE Arca Tobacco Index. The index has fallen to its lowest intraday level in nearly two months.
Philip Morris (PM) is leading the tobacco sector lower after reporting better than expected second quarter results but lowering its full-year guidance.
Financial and pharmaceutical stocks are also seeing notable weakness on the day, while natural gas and utilities stocks are bucking the downtrend.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slipped by 0.1 percent, while Hong Kong’s Hang Seng Index fell by 0.4 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index has inched up by 0.1 percent, the French CAC 40 Index and the German DAX Index are down by 0.5 percent and 0.7 percent, respectively.
In the bond market, treasuries have turned higher over the course of the morning after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.9 basis points at 2.856 percent.
by RTTNews Staff Writer
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