After showing a notable move to the downside early in the session, stocks remain mostly lower in mid-day trading on Thursday. While selling pressure has waned, disappointing U.S. economic data continues to weigh on the markets.
The major averages have bounced off their lows for the session in recent trading but remain firmly negative. The Dow is down 51.61 points or 0.4 percent at 12,368.25, the Nasdaq is down 24.09 points or 0.9 percent at 2,813.27 and the S&P 500 is down 8.98 points or 0.7 percent at 1,304.34.
The sell-off seen in early trading came on the heels of the release of a slew of U.S. economic data, including reports providing further signs of sluggishness in the labor market.
Considerable selling pressure was generated by a report from payroll processor ADP showing weaker than expected private sector job growth.
ADP said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. Economists had expected an increase of about 154,000 jobs.
A separate report from the Labor Department showed that initial jobless claims rose to 383,000 in the week ended May 26th from the previous week's revised figure of 373,000. Jobless claims had been expected to come in unchanged at the 370,000 originally reported for the previous week.
The disappointing jobs data has raised concerns about tomorrow's more closely watched monthly employment report from the Labor Department.
A Commerce Department report showing slower than previously estimated first quarter GDP growth also helped to drag stocks lower along with a report showing that Chicago-area business activity expanded at a much slower rate in the month of May.
Among individual stocks, shares of Joy Global (JOY) have come under pressure after the mining equipment maker reported better than expected second quarter results but cut its full year guidance due to lower bookings. Joy Global is currently down by 6.6 percent.
TiVo (TIVO) is also posting a notable loss after reporting a wider than expected first quarter loss and providing disappointing second quarter guidance.
Meanwhile, shares of Talbots (TLB) have jumped 90.7 percent after the women's apparel retailer agreed to be acquired by private equity firm Sycamore Partners for about $369 million, including debt.
While many of the major sectors have climbed off their worst levels, substantial weakness remains visible among oil service stocks. The Philadelphia Oil Service Index is down by 3.4 percent after hitting its lowest intraday level in over seven months.
The weakness among oil service stocks comes amid a continued decrease by the price of crude oil, with crude for July delivery falling $1.27 to $86.55 a barrel.
Steel stocks also continue to see considerable weakness on the day, with the NYSE Arca Steel Index down by 2.7 percent. With the loss, the steel index has also fallen to a seven-month low.
Adding to yesterday's losses, housing stocks are also under pressure, resulting in a 1.8 percent drop by the Philadelphia Housing Sector Index. Hovnanian Enterprises (HOV) and Standard Pacific (SPF) are turning in two of the sector's worst performances.
Natural gas, computer hardware, health insurance, and semiconductor stocks also continue to post steep losses, while modest strength has emerged among airline stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index edged down by 0.3 percent.
Meanwhile, the major European markets turned mixed over the course of the trading day. While the German DAX Index dipped 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index crept up by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries are extending yesterday's rally on the heels of the disappointing economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.4 basis points at 1.551 percent after hitting a new record low of 1.533 percent.
by RTT Staff Writer
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