Stocks are turning in a lackluster performance in mid-day trading on Thursday after failing to sustain an early upward move. While some traders have gone bargain hunting, lingering uncertainty about Europe and disappointing guidance from Cisco (CSCO) have limited the upside for the markets.
The major averages are currently turning in a mixed performance, with the tech-heavy Nasdaq posting a modest loss. While the Nasdaq is down 5.53 points or 0.2 percent at 2,929.18, the Dow is up 38.49 points or 0.3 percent at 12,873.55 and the S&P 500 is up 4.52 points or 0.3 percent at 1,359.10.
The early strength on Wall Street came as some traders picked up stocks at reduced levels following the weakness seen in recent sessions, which pulled the Nasdaq and the S&P 500 down to two-month closing lows on Wednesday.
Buying interest was somewhat subdued, however, as traders continued to express concerns about the political uncertainty in Greece, where Socialist leader Evangelos Venizelos is making a last-ditch effort to form a government and avoid a new round of elections.
The news from Cisco also generated some negative sentiment, with the networking giant falling by 10.1 percent after reporting better than expected third quarter earnings but forecast fourth quarter results below analyst estimates.
Cisco has been struggling with rising costs that have threatened to derail its earnings growth. To reduce costs, the company has cut thousands of jobs.
Meanwhile, traders are also digesting a batch of key economic data, including a report from the Labor Department showing a slight drop in initial jobless claims in the week ended May 5th.
The report showed that initial jobless claims edged down to 367,000 from the previous week's revised figure of 368,000. Economists had expected jobless claims to inch up to 366,000 from the 365,000 originally reported for the previous week.
The Commerce Department also released a report showing that the U.S. trade deficit widened to $51.8 billion in March from a revised $45.4 billion in February. The trade deficit had been expected to widen to $49.5 billion from the $46.0 billion originally reported for the previous month.
A separate report from the Labor Department showed that import prices fell by more than expected in the month of April, with the drop largely due to lower fuel prices.
With Cisco leading the way lower, networking stocks are seeing considerable weakness in mid-day trading. Reflecting the weakness in the sector, the NYSE Arca Networking Index is falling by 2.8 percent to a four-month intraday low.
Along with Cisco, Juniper Networks (JNPR) and Polycom (PLCM) are also posting notable losses, sliding by 6.5 percent and 5.7 percent, respectively.
The disappointing guidance from Cisco has also contributed to weakness in other areas of the technology stocks, with software, electronic storage, and semiconductor stocks seeing significant weakness.
On the other hand, banking stocks continue to turn in strong performances on the day, with the KBW Bank Index up by 1.2 percent after ending the previous session at a nearly two-month closing low. First Niagara (FNFG) and SunTrust (STI) are posting strong gains.
Airline, oil, and utilities stocks have also moved to the upside on the day, although buying interest remains relatively subdued.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. While Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index fell by 0.4 percent and 0.5 percent, respectively, Australia's All Ordinaries Index advanced by 0.5 percent.
Meanwhile, the major European markets all moved to the upside on the day. The German DAX Index ended the day up by 0.7 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index rose by 0.4 percent and 0.3 percent, respectively.
In the bond market, treasuries have shown a notable pullback after trending higher in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.7 basis points at 1.902 percent.
by RTT Staff Writer
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