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U.S. Stocks Turning In Mixed Performance Ahead Of Trump's Reopening Guidelines

wallstreet1 up 032918 16apr20

Following the volatility seen over the past few sessions, stocks are turning in a relatively lackluster performance during trading on Thursday. The Dow and the Nasdaq have moved in opposite directions, while the S&P 500 has been bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 88.75 points or 0.4 percent at 23,415.60, the Nasdaq is up 98.96 points or 1.2 percent at 8,492.13 and the S&P 500 is up 6.33 points or 0.2 percent at 2,789.69.

The choppy trading on Wall Street comes as President Donald Trump prepares to announce guidelines for states on reopening the country later today.

Citing encouraging developments, Trump said on Wednesday that some states could reopen before current social distancing guidelines expire on May 1st.

Traders will keep a close eye on Trump's new guidelines, which are likely to be announced at his daily coronavirus press briefing after the close of trading.

Trump has been eager to reopen at least some parts of the country even though health officials have warned reopening too early could lead to a spike in coronavirus infections.

The markets are also reacting to the Labor Department's report on first-time claims for U.S. unemployment benefits in the week ended April 11th.

The report showed more than 5 million filed for unemployment last week, although that reflects a decrease from the more than 6 million that filed for the first time in the previous week.

The Labor Department said initial jobless claims dropped to 5.245 million, a decrease of 1.370 million from the previous week's revised level of 6.615 million.

Economists had expected jobless claims to drop to 5.105 million from the 6.606 million originally reported for the previous month.

While more than 22 million people have filed for unemployment in recent weeks due to the coronavirus-induced shutdown, the drop in claims may be seen as an optimistic sign among some investors.

Meanwhile, the Commerce Department released a separate report showing a substantial decrease in new residential construction in the month of March.

The report said housing starts plunged by 22.3 percent to an annual rate of 1.216 million in March from a revised rate of 1.564 million in February.

Economists had expected housing starts to drop to a rate of 1.300 million from the 1.599 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 6.8 percent to an annual rate of 1.353 million in March from the revised February rate of 1.452 million.

Building permits, an indicator of future housing demand, had been expected to slump to a rate of 1.300 million from the 1.464 million originally reported for February.

A separate report from the Federal Reserve Bank of Philadelphia showed a substantial contraction in regional manufacturing activity in the month of April.

Despite the lackluster performance by the broader markets, retail stocks have shown a substantial move to the upside on the day. Reflecting the strength in the sector, the Dow Jones U.S. Retail Index has surged up by 2.5 percent.

Bed Bath & Beyond (BBBY) has helped lead the sector higher after reporting fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Significant strength has also emerged among gold stocks, as reflected by the 2.1 percent jump by the NYSE Arca Gold Bugs Index.

The rally by gold stocks comes amid a rebound by the price of the precious metal, with gold for June delivery surging up $17.40 to $1,757.60 an ounce after plunging $28.70 to $1,740.20 an ounce.

On the other hand, energy stocks are extending the sell-off seen in the previous session even though the price of crude oil is moving modestly higher on the day. Crude for May delivery is currently inching up $0.18 to $20.05 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 5.6 percent and the NYSE Arca Oil Index is down by 3.3 percent.

Banking stocks are also seeing further downside after falling sharply on Wednesday, with the KBW Bank Index tumbling by 2.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.3 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has fallen by 0.3 percent, the German DAX Index is up by 0.2 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

In the bond market, treasuries are extending the strong 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 3.6 basis points at 0.602 percent.

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