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Modest Strength Remains Visible On Wall Street


Buying interest has remained somewhat subdued, but stocks continue to see modest strength in mid-day trading on Thursday. The major averages have moved back to the upside following the slight drop seen over the two previous sessions.

Currently, the major averages are hovering in positive territory. The Dow is up 56.21 points or 0.2 percent at 26,061.04, the Nasdaq is up 39.58 points or 0.5 percent at 7,832.30 and the S&P 500 is up 8.48 points or 0.3 percent at 2,888.32.

Continued optimism tame inflation will lead the Federal Reserve to cut interest rates in the near future is contributing to the modest strength on Wall Street after a Labor Department report showed bigger than expected decreases in U.S. import and export prices.

The Labor Department said import prices fell by 0.3 percent in May following a revised 0.1 percent uptick in April.

Economists had expected imports prices to dip by 0.2 percent compared to the 0.2 percent increase originally reported for the previous month.

Additionally, the report said export prices edged down by 0.2 percent in May after inching up by a revised 0.1 percent in April.

Export prices had been expected to slip by 0.1 percent compared to the 0.2 percent growth originally reported for the previous month.

With the bigger than expected monthly decreases, import and export prices both showed their biggest annual declines in over two years.

Meanwhile, a separate report from the Labor Department said first-time claims for U.S. unemployment benefits unexpectedly edged higher in the week ended June 8th.

The report said initial jobless claims inched up to 222,000, an increase of 3,000 from the previous week's revised level of 219,000.

The uptick came as a surprise to economists, who had expected jobless claims to edge down to 216,000 from the 218,000 originally reported for the previous week.

Following the sell-off seen in the previous session, oil service stocks have shown a substantial move back to the upside on the day. The Philadelphia Oil Service Index has surged up by 2.9 percent after plummeting by 5.1 percent on Wednesday.

Oil service stocks are rebounding along with the price of crude oil, as crude for July delivery is jumping $1.42 to $52.56 a barrel after plunging $2.13 to $51.14 a barrel in the previous session.

The price of crude oil is rebounding on reports of a possible terrorist attack on oil tankers in the Gulf of Oman near the Iranian coastline.

While gold and steel stocks are also seeing notable strength in mid-day trading, most of the major sectors are showing only modest moves on the day.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index fell by 0.5 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

Meanwhile, European stocks saw modest strength on the day. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both closed just above the unchanged line.

In the bond market, treasuries are extending the modest upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.2 basis points at 2.105 percent.

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