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Stocks Turning In Lackluster Performance In Morning Trading - U.S. Commentary

wallstreet oct23 14mar19 lt

Stocks are turning in a relatively lackluster performance in morning trading on Thursday after ending the previous session notably higher. The major averages have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest losses. The Dow is down 36.69 points or 0.1 percent at 25,666.20, the Nasdaq is down 2.67 points or less than a tenth of a percent at 7,640.74 and the S&P 500 is down 3.24 points or 0.1 percent at 2,807.68.

The choppy trading on Wall Street comes on the heels of recent volatility on Wall Street, with the upward move seen over the past few sessions largely offsetting the pullback seen last week.

Uncertainty about Brexit may be keeping traders on the sidelines, with members of parliament due to vote later today on delaying Brexit after they rejected the idea of leaving the European Union without a deal.

Nonetheless, renewed concerns about a potential trade deal between the U.S. and China are weighing on the markets after a report from Bloomberg said a meeting between President Donald Trump and Chinese President Xi Jinping has been pushed back.

Citing three people familiar with the matter, Bloomberg said the meeting to sign an agreement to end the U.S.-China trade war won't occur this month and is more likely to happen in April at the earliest.

The report from Bloomberg comes after Trump told reporters on Wednesday that he is in "no rush" to complete a trade deal with China.

On the U.S. economic front, the Commerce Department recently released a report showing a substantial pullback in new home sales in the month of January.

The Commerce Department said new home sales plunged by 6.9 percent to an annual rate of 607,000 in January from a revised rate of 652,000 in December.

Economists had expected new home sales to edge down to a rate of 620,000 from the 621,000 originally reported for the previous month.

Before the start of trading, the Labor Department released a report showing first-time claims for U.S. unemployment benefits increased by more than expected in the week ended March 9th.

The report said initial jobless claims rose to 229,000, an increase of 6,000 from the previous week's unrevised level of 223,000. Economists had expected jobless claims to edge up to 225,000.

A separate report released by the Labor Department showed U.S. import and export prices both rose by more than anticipated in the month of February.

The Labor Department said import prices climbed by 0.6 percent in February after inching up by a revised 0.1 percent in January.

Economists had expected import prices to rise by 0.3 percent compared to the 0.5 percent drop originally reported for the previous month.

The report said export prices also increased by 0.6 percent in February after falling by a revised 0.5 percent in January.

Export prices had been expected to tick up by 0.1 percent compared to the 0.6 percent decrease originally reported for the previous month.

Most of the major sectors are showing only modest moves on the day, although considerable weakness has emerged among gold stocks.

Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index has slumped by 2.2 percent after trending higher over the past few sessions.

Gold stocks are pulling back along with the price of the precious metal, with gold for April delivery tumbling $13.70 to $1,295.60 an ounce.

Telecom, housing, and chemical stocks have also moved to the downside, while some strength is visible among banking and energy stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index closed marginally lower, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 0.5 percent and 0.6 percent, respectively.

In the bond, treasuries are showing a lack of direction amid the choppy trading on Wall Street. 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 2.618 percent.

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