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U.S. Stocks Showing A Lack Of Direction On Mixed Data

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Stocks have shown a lack of direction over the course of morning trading on Thursday following the sell-off seen in the previous session. The major averages have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains. The Dow is up 68.09 points or 0.3 percent at 25,547.51, the Nasdaq is up 14.58 points or 0.2 percent at 7,788.52 and the S&P 500 is up 11.68 points or 0.4 percent at 2,852.28.

The choppy trading on Wall Street comes as traders digest an avalanche of U.S. economic data, including mixed reports on retail sales and industrial production.

The Commerce Department released a report before the start of trading showing U.S. retail sales climbed by much more than expected in July, partly reflecting the impact of online retail giant Amazon's (AMZN) Prime Day promotion.

The report said retail sales climbed by 0.7 percent in July after rising by a revised 0.3 percent in June. Economists had expected retail sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a drop in auto sales, retail sales surged up by 1.0 percent in July following a revised 0.3 percent increase in June. Ex-auto sales had been expected to climb by 0.4 percent, matching the growth originally reported for the previous month.

The jump in ex-auto sales partly reflected a 2.8 percent spike in sales by non-store retailers amid Amazon's Prime Day sales.

Adding to the positive sentiment about retail, Walmart (WMT) reported second quarter results that beat analyst estimates on both the top and bottom lines and raised its full-year guidance.

However, the Federal Reserve released a separate report just before the open unexpectedly showing a modest decrease in industrial production in July.

The Fed said industrial production edged down by 0.2 percent in July following a revised 0.2 percent increase in June.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The unexpected drop in production was partly due to a pullback in manufacturing output, which fell by 0.4 percent in July after climbing by 0.6 percent in June.

"The soft July industrial production data show that the manufacturing recession continued into the third quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the latest surveys provide some reason for optimism and, as the retail sales data released earlier today highlight, there is still little evidence that this malaise is spreading to the wider economy."

Separate reports from the New York and Philadelphia Federal Reserves showed continued growth in regional manufacturing activity in August, although the pace of growth in the Philadelphia region slowed from last month.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in first-time claims for U.S. unemployment benefits in the week ended August 10th.

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

Oil service stocks are extending a recent sell-off, however, with the Philadelphia Oil Service Index tumbling by 2.6 percent to an eighteen-year low.

The continued weakness among oil service stocks comes amid a decrease by the price of crude oil, as crude for September delivery is sliding $0.38 to $54.85 a barrel.

Considerable weakness is also visible among networking stocks, as reflected by the 1.3 percent drop by the NYSE Arca Networking Index.

Networking giant Cisco Systems (CSCO) is posting a steep loss after reporting better than expected fiscal fourth quarter earnings but providing disappointing guidance.

On the other hand, interest rate-sensitive utilities and commercial real estate stocks have shown notable moves to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.2 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by 1.2 percent, the German DAX Index is down by 0.5 percent and the French CAC 40 Index is down by 0.2 percent.

In the bond market, treasuries are seeing modest strength after fluctuating early in the 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 1.559 percent.

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