Stocks are giving back some ground in early afternoon trading on Wednesday after showing a notable upward move over the course of the morning. The major averages are pulling back well off their highs, although they currently remain in positive territory.
Upbeat economic data contributed to the strength seen earlier in the session, as traders reacted to a Labor Department report showing that weekly jobless claims fell below 500,000 as well as a Commerce Department report showing strong new home sales growth in October.
Buying interest remained somewhat subdued, however, with many traders already away from their desks ahead of the Thanksgiving Day holiday. Subsequently, some traders have looked to cash in on the gains, although selling pressure has also been relatively tame.
Trading activity is likely to continue to tail off in afternoon trading, as some traders look to get a head start on the holiday. The limited volume could contribute to increased volatility.
The major averages have ticked back to the upside in the past few minutes, although they remain well off their best levels of the day. The Dow is currently up 26.15 at 10,459.86, the Nasdaq is up 5.46 at 2,174.64 and the S&P 500 is up 3.16 at 1,108.81.
Sector News
While gold stocks continue to turn in some of the best performances, significant strength has also emerged among airline stocks. The strength in the airline sector is reflected by the 1.4 percent gain currently being shown by the NYSE Arca Airline Index.
US Airways (LCC) is turning in one of the sector's best performances, with the airline currently up 6 percent after reaching its best intraday level in a month. The gain comes as traders continue to react to the company's liquidity improvement program announced on Tuesday.
Steel and natural gas stocks have also shown strong moves to the upside over the course of the trading session, with the NYSE Arca Steel Index and the NYSE Arca Natural Gas Index currently up 1.6 percent and 1.2 percent, respectively.
Notable strength is also visible among electronic storage, telecom, chemical, and retail stocks, although buying interest remains relatively subdued. On the other hand, banking stocks are moving to the downside, contributing to the pullback by the major averages.
Stocks In The News
Incyte Corp. (INCY) is turning in a strong performance in early afternoon trading, with the drug discovery and development company currently up 10.4 percent. At its high for the session, Incyte was at its best intraday level in over a year.
The gain by Incyte comes after the company announced that it has entered into a collaboration and license agreement with Novartis (NVS) for two of its investigational hematology-oncology therapies. Incyte said that deal could be worth up to $1.3 billion.
Shares of J. Crew Group (JCG) have also shown a strong upward move after the apparel retailer reported third quarter earnings and revenues that increased by more than analysts had been expecting. J. Crew is currently up 7.7 percent after reaching a more than one-year intraday high.
On the other hand, shares of Coldwater Creek (CWTR) are currently down 16.1 percent after the women's apparel retailer reported an adjusted third quarter loss that came in wider than expected. At its low for the session, Coldwater was at its worst intraday level in over five months.
In Focus: Economic News
As mentioned above, the Labor Department released a report before the start of trading showing that initial jobless claims in the week ended November 21st fell below the 500,000 level for the first time since early January.
The report showed that jobless claims fell to 466,000 from the previous week's revised figure of 501,000. Economists had been expecting jobless claims to edge down to 500,000 from the 505,000 originally reported for the previous week.
Additionally, a report from the Commerce Department showed that new home sales increased by much more than expected in the month of October, with the report also showing an increase in sales compared to the same month a year ago.
The Commerce Department said new home sales rose 6.2 percent to an annual rate of 430,000 in October from the revised September rate of 405,000. Economists had expected sales to edge up to 404,000 from the 402,000 originally reported for the previous month.
While the Commerce Department released a separate report showing that durable goods orders unexpectedly decreased in the month of October, the report also showed a notable upward revision to pace of order growth in September.
Other Markets
In overseas trading, stocks markets across the Asia-Pacific region moved back to the upside on Wednesday after moving lower over the course of the previous session. After ending Tuesday's trading down by 1 percent, Japan's benchmark Nikkei 225 Index closed up 0.4 percent.
The major European markets also rebounded after seeing some weakness on Tuesday, with the U.K.'s FTSE 100 Index advancing by 0.8 percent, while the French CAC 40 Index and the German DAX Index rose by 0.7 percent and 0.6 percent, respectively.
In the bond market, treasuries continue to see modest weakness amid the strength on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is currently up 2.4 basis points at 3.341 percent.
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