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Nasdaq Showing Notable Advance While Dow, S&P 500 Show A Lack Of Direction

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Stocks are turning in a relatively lackluster performance in morning trading on Thursday, although the tech-heavy Nasdaq has shown a strong move to the upside. The Dow and the S&P 500 have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 93.38 points or 0.9 percent at 11,105.62 and the S&P 500 is up 2.62 points or 0.1 percent at 3,382.97, the Dow is down 57.52 points or 0.2 percent at 27,919.32.

The choppy trading on Wall Street comes as traders express some uncertainty about the outlook for the markets, as the S&P 500 continues to flirt with the record high it set in February.

The notable advance by the Nasdaq is partly due to strong gains by tech giants such as Google parent Alphabet (GOOGL), Amazon (AMZN), Facebook (FB).

Meanwhile, a steep drop by Cisco Systems (CSCO) is weighing on the Dow, with the networking giant plunging by 11.8 percent after reporting better than expected fiscal fourth quarter results but providing disappointing guidance.

Traders may also be keeping an eye on developments in Washington, where Democrats and White House officials remain at an impasse over a coronavirus relief bill.

House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin spoke on Wednesday, but both sides came out of the conversation blaming the other for a lack of progress.

President Donald Trump, who has taken unprecedented action to circumvent Congress due to the impasse, claimed "the bill's not going to happen" during a press briefing.

The ongoing stalemate over a new stimulus bill has raised concerns the economic recovery implied by recent data could stall.

Before the start of trading, the Labor Department released a report showing first-time claims for U.S. unemployment benefits declined by much more than anticipated in the week ended August 8th.

The Labor Department said initial jobless claims tumbled to 963,000, a decrease of 228,000 from the previous week's revised level of 1.191 million.

Economists had expected jobless claims to slide to 1.120 million from the 1.186 million originally reported for the previous week.

With the much bigger than expected decrease, jobless claims dropped below 1 million for the first time since the week ended March 14th.

"The drop in claims reflects economic reopening, but it also suggests the expiration of federal supplemental unemployment benefits may have convinced some people to stop collecting and find work," said Chris Low, Chief Economist at FHN Financial.

He added, "Alternatively, people could be falling off rolls because they no longer qualify for assistance in the absence of the emergency expansion of eligibility."

Most of the major sectors are showing only modest moves on the day, although substantial strength is visible among gold stocks. Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index has surged up by 3.4 percent.

The rally by gold stocks comes as the price of the precious metal has turned higher over the course of the day, with gold for December delivery climbing $6.20 to $1,955.20 an ounce after hitting a low of $1,923 an ounce.

Software stocks are also seeing notable strength, extending the rebound seen in the previous session. After ending Wednesday's trading up by 2 percent, the Dow Jones U.S. Software Index is advancing by 1.2 percent.

On the other hand, banking stocks have come under pressure over the course of the morning, dragging the KBW Bank Index down by 1.4 percent.

Natural gas, oil service, and computer hardware stocks are also seeing notable weakness, offsetting the strength in the aforementioned sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.8 percent, while Australia's S&P/ASX 200 Index slid by 0.7 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 1.4 percent, the French CAC 40 Index and the German DAX Index are both down by 0.6 percent.

In the bond market, treasuries are seeing modest weakness, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 0.685 percent.

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