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Major Averages Turning In Mixed Performance In Morning Trading - U.S. Commentary

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After climbing to record closing highs in the previous session, the major averages have turned mixed in morning trading on Thursday. The Dow has inched higher on the day, while the broader Nasdaq and S&P 500 have pulled back into negative territory.

Currently, the Dow is up 5.79 points or less than a tenth of a percent at 22,163.97. Meanwhile, the Nasdaq is down 17.54 points or 0.3 percent at 6,442.65 and the S&P 500 is down 2.93 points or 0.1 percent at 2,495.44.

The pullback by the Nasdaq and the S&P 500 comes following the release of a Labor Department report showing a bigger than expected increase in consumer prices in the month of August.

The Labor Department said its consumer price index climbed by 0.4 percent in August after inching up by 0.1 percent in July. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in August following a 0.1 percent uptick in the previous month. The increase in core prices matched economist estimates.

The annual rate of growth in consumer prices accelerated to 1.9 percent in August from 1.7 percent in July, although the annual growth in core consumer was prices was unchanged at 1.7 percent.

The faster rate of consumer price growth has raised some concerns about the outlook for the Federal Reserve's monetary policy.

A separate report from the Labor Department showed an unexpected pullback in initial jobless claims in the week ended September 9th.

The report said initial jobless claims fell to 284,000, a decrease of 14,000 from the previous week's unrevised level of 298,000. The drop surprised economists, who had expected jobless claims to inch up to 300,000.

Geopolitical concerns have also generated some selling pressure after North Korea threatened to use nuclear weapons to "sink" Japan and reduce the U.S. to "ashes and darkness" for supporting a new round of sanctions by the United Nations.

Meanwhile, the Dow is benefiting from notable gains by Boeing (BA) and Pfizer (PFE), which are both climbing by 1.3 percent.

Boeing is moving higher after announcing plans to raise production of its 787 Dreamliner in 2019, while Pfizer is benefiting from positive trial results for its cancer drug Xtandi.

Most of the major sectors are showing only modest moves on the day, extending the lackluster performance seen in the previous session.

Energy stocks are adding to yesterday's gains, however, with a sharp increase by the price of crude oil generating buying interest. Crude for October delivery is jumping $1.03 to $50.33 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index are surging up by 2 percent and 1.8 percent, respectively.

Railroad stocks are also seeing notable strength on the day, while steel stocks have come under pressure amid concerns about demand from China.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has inched up by 0.1 percent, the German DAX Index is down by 0.2 percent and the U.K.'s FTSE 100 Index is down by 1 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.201 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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