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Major Averages Close Mixed Following Volatile Session - U.S. Commentary

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Following the lackluster performance seen in the previous session, stocks saw considerable volatility during the trading day on Thursday. The major averages showed some wild swings before ending the session on opposite sides of the unchanged line.

While the Dow climbed well off its worst levels of the day, the blue chip index still ended the day down 134.97 points or 0.5 percent to 26,462.08.

On the other hand, the Nasdaq rose 16.67 points or 0.2 percent to 8,118.68 and the S&P 500 inched up 1.08 points or less than a tenth of a percent to 2,926.17.

A steep drop by shares of 3M (MMM) weighed on the Dow, with the diversified manufacturer plunging by 12.9 percent on the day.

The sell-off by 3M came after the company reported weaker than expected first quarter results and lowered its full-year guidance.

On the other hand, jumps by shares of Facebook (FB) and Microsoft (MSFT) contributed to the modest advance by the tech-heavy Nasdaq.

The social media giant and the software giant surged up by 5.9 percent and 3.3 percent, respectively, after both reported quarterly results that exceeded analyst estimates on both the top and bottom lines.

Traders were also digesting a mixed batch of U.S. economic data ahead of the release of closely watched first quarter GDP data on Friday.

The Commerce Department released a report showing durable goods orders jumped by much more than expected in the month of March, reflecting a significant rebound in orders for transportation equipment,

The report said durable goods orders surged up by 2.7 percent in March after tumbling by a revised 1.1 percent in February.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.6 percent slump originally reported for the previous month.

Excluding the spike in orders for transportation equipment, durable goods orders rose by 0.4 percent in March after edging down by a revised 0.2 percent in February.

Ex-transportation orders had been expected to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Labor Department released a separate report showing initial jobless claims rebounded by more than anticipated in the week ended April 20.

The Labor Department said initial jobless claims climbed to 230,000, an increase of 37,000 from the previous week's revised level of 193,000. Economists had expected jobless claims to rise to 200,000.

The bigger than expected increase came after the number of jobless claims in the previous week represented their lowest level since hitting 182,000 in September of 1969.

Sector News

Tobacco stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 3.6 percent to its lowest closing level in over two months.

Considerable weakness was also visible among networking stocks, as reflected by the 2.3 percent slump by the NYSE Arca Networking Index.

Netgear (NTGR) posted a steep loss after reporting better than expected first quarter results but providing disappointing second quarter guidance.

Transportation, oil service, and semiconductor stocks also saw significant weakness on the day, while Microsoft led the software sector sharply higher.

Reflecting the strength in the software sector, the Dow Jones U.S. Software Index surged up by 2 percent to a record closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index slumped by 0.9 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index and the German DAX Index both dropped by 0.3 percent.

In the bond market, treasuries showed a lack of direction before ending the session modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ticked up by 1.2 basis points to 2.534 percent.

Looking Ahead

Earnings news may remain in the spotlight on Friday, with Amazon (AMZN), Capital One (COF), Intel (INTC), and Starbucks (SBUX) among the companies releasing their quarterly results after the close of today's trading.

Energy giants Exxon Mobil (XOM) and Chevron (CVX) are also among the companies due to report their results before the start of trading on Friday.

Trading may also be impacted by reaction to a preliminary reading on first quarter GDP, with the pace of growth expected to slow to 2.1 percent from 2.2 percent in the fourth quarter.

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