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Stocks Turning In Lackluster Performance In Early Trading - U.S. Commentary

Stocks are turning in a lackluster performance in early trading on Thursday, as traders weigh upbeat bank earnings against disappointing jobs data. The major averages are lingering near the unchanged line after ending the previous session firmly in the red.

Currently, the major averages are turning in a mixed performance, with the Nasdaq posting a modest gain. While the Nasdaq is up 6.09 points or 0.2 percent at 3,037.54, the Dow is down 3.33 points or less than 0.1 percent at 13,029.42 and the S&P 500 is down 0.12 points or less than 0.1 percent at 1,385.02.

Better than expected earnings from Bank of America (BAC) and Morgan Stanley (MS) generated some positive sentiment earlier in the day along with news of another successful Spanish bond auction.

Bank of America reported first quarter earnings of $0.03 per share compared to $0.17 per share a year ago, but the results included an accounting charge of $0.28 per share. Excluding the charge, the company earned $0.31 per share versus analyst estimates for $0.12 per share.

Morgan Stanley reported a first quarter net loss of $0.06 per share but reported a profit of $0.71 per share excluding a big accounting charge. Analysts had expected the company to earn $0.44 per share.

However, the buying interest was offset by the release of a report from the Labor Department showing initial jobless claims well above economist estimates in the week ended April 14th.

Jobless claims edged down to 386,000 from the previous week's revised figure of 388,000 but still came in well above economist estimates of 365,000.

"Discouraging news on initial jobless claims suggest job growth is slowing," said Jennifer Lee, senior economist at BMO Capital Markets. "Still growing, mind you, but at a slower pace."

Most of the major sectors are showing only modest moves in early trading, contributing to the lack of direction being shown by the broader markets.

Nonetheless, considerable strength is visible among biotech stocks, with the NYSE Arca Biotechnology Index up by 6.8 percent. Human Genome Sciences (HGSI) is posting a standout gain on news that the company rejected a takeover bid from GlaxoSmithKline (GSK) valuing the company at $2.6 billion.

Health insurance and oil service stocks have also moved to the upside, while some telecom and computer hardware stocks are posting steep losses.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. While Japan's Nikkei 225 Index ended the day down by 0.8 percent, Hong Kong's Hang Seng Index closed up by 1 percent.

The major European markets have also turned mixed over the course of the trading day. The U.K.'s FTSE 100 Index is up by 0.4 percent, while the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.8 percent.

In the bond market, treasuries have moved to the upside on the heels of the disappointing jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 1.956 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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