After showing a significant recovery over the course of the previous session, stocks have moved modestly lower in early trading on Thursday. The major averages have all slipped into negative territory after ending Wednesday's trading mixed.
The major averages have bounced off their lows for the young session but currently remain in the red. The Dow is down 26.03 points or 0.2 percent at 12,470.12, the Nasdaq is down 13.41 points or 0.5 percent at 2,836.71 and the S&P 500 is down 1.07 points or 0.1 percent at 1,317.79.
The modest weakness that has emerged on Wall Street reflects lingering concerns about the outlook for the global economy amid continued uncertainty about the financial situation in Europe and the release of a disappointing report on Chinese manufacturing.
Traders are also digesting some relatively lackluster U.S. economic data, including a report from the Commerce Department showing a drop by a key indicator of business spending.
The Commerce Department said orders for non-defense capital goods excluding aircraft, which are seen as an indicator of business spending, fell by 1.9 percent in April following a 2.2 percent drop in March.
Jennifer Lee, senior economist at BMO Capital Markets, said, "We haven't seen two straight months of declines for over a year, a negative development for equipment & spending in the latter half of this year."
"There is a possibility that concerns over global growth, stemming from Europe, are causing businesses to hold back orders for new equipment," she added.
The data was included in the Commerce Department's report on durable goods orders in the month of April, which showed a modest increase in orders amid a rebound in orders for transportation equipment.
A separate report from the Labor Department showed a modest decrease in initial jobless claims in the week ended May 19th. The report showed that jobless claims edged down to 370,000 from the previous week's revised figure of 372,000.
Electronic storage stocks have shown a notable move to the downside, dragging the NYSE Arca Disk Drive Index down by 1.5 percent. NetApp (NTAP) is leading the sector lower after reporting better than expected fourth quarter earnings but providing disappointing guidance.
Steel, internet, and software stocks have also come under pressure on the day, while significant strength is visible among health insurance and airline stocks.
Among individual stocks, Hewlett-Packard (HPQ) is up by 6 percent after reporting better than expected second quarter results and raising its full year adjusted earnings guidance. The company also announced a multi-year restructuring plan that includes the elimination of about 27,000 jobs.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index ended the day down by 0.6 percent.
Meanwhile, the major European markets have moved to the upside over the course of the trading day. While the German DAX Index is up by 0.3 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 1.2 percent.
In the bond market, treasuries have come under pressure after ending the previous session firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.8 basis points at 1.759 percent.
by RTT Staff Writer
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