U.S. Stocks Give Back Ground After Seeing Early Strength

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After showing a strong move to the upside early in the session, stocks have given back ground over the course of morning trading on Thursday. The major averages have pulled back well off their highs of the session, with the Dow dipping into negative territory.

Currently, the Dow is down 28.36 points or 0.1 percent at 33,273.57 after jumping by more than 220 points in early trading. Meanwhile, the Nasdaq is up 13.35 points or 0.1 percent at 12,502.29 and the S&P 500 is up 8.30 points or 0.2 percent at 4,192.26.

The early strength on Wall Street came amid another batch of upbeat earnings news, with shares of Meta (FB) soaring after the Facebook parent reported better than expected quarterly earnings.

Chipmaker Qualcomm (QCOM) has also shown a strong move to the upside after reporting quarterly results that beat expectations on both the top and bottom lines.

McDonald's (MCD), Merck (MRK), and Eli Lilly (LLY) are also seeing strength after reporting better than expected quarterly earnings.

However, buying interest waned shortly after the start of trading, as investors reacted to a Commerce Department report showing U.S. economic activity unexpectedly contracted in the first quarter of 2022.

The report said real gross domestic product declined by 1.4 percent in the first quarter after spiking by 6.9 percent in the fourth quarter of 2021. The pullback surprised economists, who had expected GDP to increase by 1.1 percent.

The Commerce Department said the unexpected drop in GDP reflected decreases in private inventory investment, exports, and government spending along with an increase in imports, which are a subtraction in the calculation of GDP

On the other hand, the report showed increases in consumer spending, non-residential fixed investment and residential fixed investment.

A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits edged slightly lower in the week ended April 23rd.

Oil service stocks have shown a significant move to the downside on the day, resulting in a 2.1 percent slump by the Philadelphia Oil Service Index.

The weakness among oil service stocks comes even though the price of crude oil for June delivery is climbing $0.54 to $102.56 a barrel.

Biotechnology stocks have also come under pressure, dragging the NYSE Arca Biotechnology Index down by 1.8 percent to its lowest intraday level in two years.

Airline, brokerage and chemical stocks also moved to the downside on the day, while strength remains visible among semiconductor and utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.8 percent, while China's Shanghai Composite Index climbed by 0.6 percent.

Most European stocks have also moved to the upside on the day. While the French CAC 40 Index is nearly unchanged, the German DAX Index is up by 0.9 percent and the U.K.'s FTSE 100 Index is up b y 1 percent.

In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.1 basis points at 2.849 percent.

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