Stocks are turning in a lackluster performance in early trading on Thursday, as traders weigh upbeat earnings news from Cisco (CSCO) against a batch of disappointing economic data.
The major averages are turning in a mixed performance, with the Nasdaq posting a modest gain. While the Nasdaq is up 4.75 points or 0.1 percent at 3,476.37, the Dow is down 16.09 points or 0.1 percent at 15,259.60 and the S&P 500 is down 1.15 points or 0.1 percent at 1,657.63.
The gain by the tech-heavy Nasdaq is partly due to a strong advance by shares of Cisco, which have surged up by 13.4 percent.
After the close of trading on Wednesday, Cisco reported better than expected third quarter results, with further buying interest generated by Chairman and CEO John Chambers' remarks indicating that the company is starting to see some encouraging signs in the U.S. and other parts of the world.
The news from Cisco has contributed to considerable strength in the networking sector. The NYSE Arca Networking Index has jumped 3.2 percent to its best intraday level in almost three months.
However, the positive sentiment was partly offset by a batch of disappointing U.S. economic data, including a report from the Labor Department showing a bigger than expected increase in initial jobless claims in the week ended May 11th.
The report said initial jobless claims rose to 360,000, an increase of 32,000 from the previous week's revised figure of 328,000. Economists had expected claims to climb to 330,000 from the 323,000 originally reported for the previous week.
A separate report from the Commerce Department showed that housing starts tumbled 16.5 percent to a seasonally adjusted annual rate of 853,000 in April from the revised March estimate of 1.021 million.
Economists had expected housing starts to drop to an annual rate of 969,000 from the 1.036 million originally reported for the previous month.
On the other hand, the report also showed that building permits, an indicator of future housing demand, jumped 14.3 percent to an annual rate of 1.017 million in April from the revised March rate of 890,000.
Disappointing quarterly results from Wal-Mart (WMT) are also weighing on the markets, with the retail giant down by 1.6 percent in early trading.
Biotechnology stocks have come under considerable selling pressure, dragging the NYSE Arca Biotechnology Index down by 1.8 percent. The index is pulling back further off the record closing high that it set on Tuesday.
Steel and gold stocks have also shown notable moves to the downside on the day, while most of the major sectors are showing only modest moves.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index pulled back by 0.4 percent, Hong Kong's Hang Seng Index edged up by 0.2 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index have edged down by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries have moved notably higher on the heels of the disappointing economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4 basis points at 1.903 percent.
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