With traders expressing uncertainty about the near-term outlook for the markets, stocks are turning in a lackluster performance during trading on Thursday. The choppy trading comes after the markets saw considerable volatility over the course of the two previous sessions.
The major averages have moved to the downside in recent trading and are currently posting moderate losses. The Dow is down 32.54 points or 0.3 percent at 12,463.61, the Nasdaq is down 18.38 points or 0.6 percent at 2,831.74 and the S&P 500 is down 4.10 points or 0.3 percent at 1,314.76.
The lack of direction being shown by stocks comes as traders seem reluctant to make any significant moves following the sell-off seen earlier this month.
While some analysts have described the markets as oversold in light of the recent weakness, traders appear reluctant to go bargain hunting amid continued concerns about the financial situation in Europe.
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 said jobless claims edged down to 370,000 from the previous week's revised figure of 372,000.
Among individual stocks, Hewlett-Packard (HPQ) is up by 2.7 percent after reporting better than expected second quarter results and raising its full year adjusted earnings guidance. The PC giant also announced a multi-year restructuring plan that includes the elimination of about 27,000 jobs.
Shares of Pandora Media (P) have also shown a strong upward move after the online radio service reported a narrower than expected first quarter loss and provided upbeat guidance Pandora is currently posting a 15.4 percent gain.
Meanwhile, shares of Tiffany (TIF) have come under pressure after the luxury goods retailer reported weaker than expected first quarter earnings and slashed its full year guidance.
Sector News
While most of the major sectors are showing only modest moves, considerable weakness is visible among electronic storage stocks. Reflecting the weakness in the storage sector, the NYSE Arca Disk Drive Index is down by 2.2 percent.
NetApp (NTAP) is leading the storage sector lower, with the data storage equipment maker down by 14.2 percent after reporting better than expected fourth quarter earnings but providing disappointing guidance.
Significant weakness has also emerged among networking stocks, as reflected by the 1.8 percent loss being posted by the NYSE Arca Networking Index. Acme Packet (APKT) and Polycom (PLCM) are turning in two of the sector's worst performances.
Meanwhile, airline stocks have moved sharply higher on the day, driving the NYSE Arca Airline Index up by 2.6 percent. The strength in the sector is partly due to positive comments from an analyst at JP Morgan.
Other Markets
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 all moved to the upside over the course of the trading day. While the German DAX Index rose by 0.5 percent, the French CAC 40 Index advanced by 1.2 percent, and the U.K.'s FTSE 100 Index jumped 1.6 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 4.8 basis points at 1.769 percent.
by RTT Staff Writer
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