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Stocks Continue To Experience Choppy Trading - U.S. Commentary


Stocks continue to show a lack of direction in mid-day trading on Thursday, extending the lackluster performance that was seen in the previous session. The major averages are once again showing only modest moves after ending Wednesday's trading nearly flat.

Currently, the major averages continue to turn in a mixed performance. While the Nasdaq is up 10.46 points or 0.2 percent at 4,977.60, the Dow is down 20.33 points or 0.1 percent at 18,204.24 and the S&P 500 is down 3.20 points or 0.2 percent at 2,110.66.

Uncertainty about the near-term outlook for the markets may be contributing to the choppy trading following the recent strength on Wall Street.

The recent gains have lifted the Dow and the S&P 500 to new record highs, while the Nasdaq is back at its best levels since early 2000.

The lack of direction being shown by the markets also comes as traders digest the slew of U.S. economic data that was released before the start of trading.

The Labor Department released a report showing that initial jobless claims rose by much more than expected in the week ended February 21st.

The report said initial jobless claims jumped to 313,000, an increase of 31,000 from the previous week's revised level of 282,000. Economists had expected jobless claims to edge up to 290,000.

A separate report from the Labor Department showed that consumer prices fell by slightly more than expected in January amid another substantial decrease in energy prices.

The Labor Department said its consumer price index tumbled by 0.7 percent in January after falling by 0.3 percent in each of the two previous months. Economists had expected the index to drop by 0.6 percent.

Meanwhile, excluding food and energy prices, the core consumer price index edged up by 0.2 percent in January after inching up by 0.1 percent in December. Core prices had been expected to tick up by another 0.1 percent.

Reflecting a notable rebound in orders for transportation equipment, the Commerce Department also released a report showing that durable goods orders increased by more than expected in January.

The report said durable goods orders surged up by 2.8 percent in January after tumbling by a revised 3.7 percent in December. Economists had expected durable goods orders to jump by 1.7 percent.

However, excluding the rebound in orders for transportation equipment, durable goods orders rose by just 0.3 percent compared to economist estimates for a 0.5 percent increase.

Sector News

Reflecting the lackluster performance being turned in by the broader markets, most of the major sectors are showing only modest moves in mid-day trading.

Gold stocks have shown a strong move to the upside, however, with the NYSE Arca Gold Bugs Index surging up by 1.6 percent. The strength in the sector comes as the price of gold for April delivery is climbing $9.20 to $1,210.70 an ounce.

Significant strength has also emerged among internet stocks, as reflected by the 1.1 percent gain being posted by the Dow Jones Internet Index. With the gain, the index has reached its best intraday level in over fourteen years.

On the other hand, energy stocks have come under pressure, with natural gas stocks posting particularly steep losses. The NYSE Arca Natural Gas Index has tumbled by 3.2 percent after ending the previous session at a nearly three-month closing high.

The weakness among energy stocks comes as the prices of crude oil and natural gas are showing notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.1 percent, while Australia's All Ordinaries Index fell by 0.5 percent.

Meanwhile, the major European markets all ended the day on the upside. While the U.K's FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index advanced by 0.6 percent and the German DAX Index jumped by 1 percent.

In the bond market, treasuries have moved modestly lower after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.4 basis points at 1.983 percent.

by RTTNews Staff Writer

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