Plus   Neg

Stocks Give Back Ground After Early Upward Move - U.S. Commentary


After an early move to the upside, stocks have given back ground over the course of morning trading on Thursday. The major averages have pulled back off their highs of the session, with the Dow and the S&P 500 briefing turning negative.

Currently, the major averages are posting modest gains. The Dow is up 27.56 points or 0.1 percent at 24,828.92, the Nasdaq is up 11.65 points or 0.2 percent at 7,408.29 and the S&P 500 is up 2.05 points or 0.1 percent at 2,728.85.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

Employment is expected to jump by 200,000 jobs in February, matching the increase seen in January. The unemployment rate is expected to dip to 4.0 percent from 4.1 percent.

Ahead of the monthly report, the Labor Department released a report this morning showing a bigger than expected rebound in initial jobless claims in the week ended March 3rd.

The report said initial jobless claims climbed to 231,000, an increase of 21,000 from the previous week's unrevised level of 210,000. Economists had expected jobless claims to rise to 220,000.

The bigger than expected increase came after jobless claims fell to their lowest level since December of 1969 in the previous week.

Uncertainty about the details of President Donald Trump's planned tariffs on steel and aluminum imports may also be keeping some traders on the sidelines.

White House Press Secretary Sarah Sanders suggested in comments on Wednesday that Mexico and Canada could be exempt from the tariffs.

Traders are also digesting the European Central Bank's latest monetary policy decision, with the ECB leaving rates unchanged, as widely expected.

The ECB's accompanying statement removed a phrase indicating a willingness to increase its asset purchase program if necessary.

"The change is arguably the ECB's first cautious step along a path of gradual policy normalization, which explains the immediate rise in the euro," said Jennifer McKeown, Chief European Economist at Capital Economics.

She added, "But it won't have come as a complete surprise given the ECB's earlier warning that it would 'revisit' its forward guidance early this year."

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

Steel stocks are seeing considerable weakness, however, with the NYSE Arca Steel Index slumping by 1.8 percent. The index is on pace to end the session at its lowest closing level in almost a month.

Notable weakness also emerged among banking stocks, as reflected by the 1 percent loss being posted by the KBW Bank Index.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.5 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.3 percent, the German DAX Index is up by 0.9 percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries are moving higher after closing roughly flat for two consecutive sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.1 basis points at 2.852 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT