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U.S. Stocks Nearly Flat After Recovering From Initial Weakness


After an initial move to the downside, stocks have regained some ground over the course of morning trading on Thursday. The major averages have climbed well off their lows of the young session, with the S&P 500 peeking above the unchanged line.

Currently, the major averages are turning in a mixed performance. While the S&P 500 is up 2.00 points or 0.1 percent at 2,986.42, the Dow is down 141.6 points or 0.1 percent at 27,205.69 and the Nasdaq is down 0.91 points or less than a tenth of a percent at 8,184.30.

The initial weakness on Wall Street was partly due to a negative reaction to the latest earnings news, with shares of Netflix (NFLX) showing a particularly steep drop.

Netflix is currently down by 10.5 percent after the video streaming giant reported better than expected second quarter earnings but weaker than expected international subscriber growth.

Health insurer UnitedHealth (UNH) has also come under pressure despite reporting better than expected second quarter results and raising its full-year guidance.

On the other hand, shares of giant eBay (EBAY) have shown a strong move to the upside after the eCommerce giant reported second quarter results that beat expectations and raised its profit forecast.

Tech giant IBM Corp. (IBM) is also posting a notable gain after reporting second quarter earnings that beat analyst estimates but a continued decline in revenues.

Overall trading activity is somewhat subdued, however, as traders stick to the sidelines ahead of the release of quarterly results from software giant Microsoft (MSFT) after the close of today's trading.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits increased in line with economist estimates in the week ended July 13th.

The report said initial jobless claims inched up to 216,000, an increase of 8,000 from the previous week's revised level of 208,000.

Economists had expected jobless claims to creep up to 216,000 from the 209,000 originally reported for the previous week.

A separate report from the Philadelphia Federal Reserve showed its reading on regional manufacturing activity jumped much more than expected in the month of July.

The Philly Fed said its diffusion index for current general activity surged up to 21.8 in July after tumbling to 0.3 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 5.0.

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

Retail stocks are seeing considerable weakness, however, with the Dow Jones U.S. Retail Index slumping by 1.3 percent. The index continues to give back ground after reaching a record closing high on Monday.

On the other hand, tobacco stocks have shown a substantial move to the upside in morning trading, driving the NYSE Arca Tobacco Index up by 2.1 percent.

Philip Morris (PM) is leading the tobacco sector higher after reporting better than expected second quarter results and raising its full-year guidance.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 2 percent, while China's Shanghai Composite Index slumped by 1 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.4 percent and 0.6 percent, respectively.

In the bond market, treasuries are showing a lack of direction following the notable advance seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.064 percent.

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