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Major Averages Remain Mixed In Mid-Day Trading - U.S. Commentary


After moving in opposite directions early in the session, the major averages continue to turn in a mixed performance in mid-day trading on Thursday. The Dow is hovering in positive territory, while the broader Nasdaq and S&P 500 are in the red.

While the Dow is currently up 19.52 points or 0.1 percent at 22,177.70, the Nasdaq is down 14.69 points or 0.2 percent at 6,445.49 and the S&P 500 is down 2.01 points or 0.1 percent at 2,496.33.

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 drug giants Pfizer (PFE) and Merck (MRK). Boeing (BA) has also moved higher after announcing plans to raise production of its 787 Dreamliner in 2019.

Sector News

Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Steel stocks are seeing substantial weakness, however, with the NYSE Arca Steel Index slumping by 1.9 percent. The weakness in the sector comes as disappointing Chinese economic data has raised concerns about the outlook for demand.

Considerable weakness is also visible among trucking stocks, as reflected by the 1.3 percent drop by the Dow Jones Trucking Index. YRC Worldwide (YRCW) and C.H. Robinson (CHRW) are posting notable losses.

On the other hand, natural gas stocks continue to see significant strength, driving the NYSE Arca Natural Gas Index up by 1.9 percent. The strength in the sector comes amid an increase in energy prices.

Other Markets

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 turned in a mixed performance on the day. While the French CAC 40 Index crept up by 0.2 percent, the German DAX Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index tumbled by 1.1 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 down by less than a basis point at 2.194 percent.

by RTTNews Staff Writer

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