After failing to sustain an early upward move, stocks showed a lack of direction over the course of the trading day on Thursday. The choppy trading on the day came on the heels of the downward trend seen over the past several sessions.
The major averages eventually ended the session mixed, with the Nasdaq edging down by 1.07 points or less than a tenth of a percent to 2,933.64, while the Dow crept up 19.98 points or 0.2 percent to 12,855.04 and the S&P 500 rose 3.41 points or 0.3 percent to 1,357.99.
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.
Disappointing news from Cisco Systems (CSCO) also generated some negative sentiment, with the networking giant falling by 10.5 percent after reporting better than expected third quarter earnings but forecasting 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 were 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.
While most of the major sectors showed only modest moves, networking stocks saw significant weakness following the news from Cisco. Reflecting the weakness in the sector, the NYSE Arca Networking Index fell 2.8 percent to its worst closing level in well over four months.
Along with Cisco, Acme Packet (APKT) and Juniper Networks (JNPR) also posted steep losses, sliding by 5.1 percent and 4.9 percent, respectively.
The disappointing guidance from Cisco also contributed to weakness in other areas of the technology stocks, with software and electronic storage seeing considerable weakness.
Meanwhile, utilities stocks showed a strong move to the upside on the day, resulting in a 1 percent gain by the Dow Jones Utilities Average. Banking stocks also held on notable gains but ended the session well off their best levels.
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 showed 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, rose by 4.9 basis points to 1.884 percent.
Economic data may attract some attention on Friday, with traders likely to keep an eye on reports on producer prices and consumer sentiment.
by RTT Staff Writer
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