Investors are selling stocks in morning trading on Thursday following the release of some weak employment data. Nonetheless, a better than expected housing report has prompted the markets to pare some of their earlier losses.
Before the markets opened, the Labor Department released its weekly jobless claims report, showing that the number of people filing initial claims for jobless benefits continued to increase in the week ended August 2nd, rising their highest level in over six years.
The report showed that jobless claims rose to 455,000 from the previous week's unrevised figure of 448,000. The increase came as a surprise to economists, who had been expecting jobless claims to fall to 420,000.
Nonetheless, the markets pared their losses after the National Association of Realtors released its report on pending home sales in the month of June, showing that pending home sales unexpectedly rebounded following a notable decrease in the previous month.
The report showed that pending home sales increased by 5.3 percent in June following a revised 4.9 percent decrease in the previous month. Economists had been expecting pending home sales to fall by about 1.0 percent compared to the 4.7 percent decrease originally reported for May.
Investors are considering a slew of corporate data as well. AIG (AIG) released results showing a steep second quarter loss, sending the stock sharply lower. Shares of the insurer are currently down 17.7 percent.
Additionally, Wal-Mart Stores (WMT) said total comparable store sales, excluding fuel, were only up 3 percent in July, which was below analysts' estimates of 3.4 percent growth. The retail giant is falling 3.8 percent.
In recent trading, the major averages have moved well off of their intraday lows, although they continue to show weakness. The Dow is currently down 95.75 at 11,560.32, the Nasdaq is down 9.51 at 2,368.86 and the S&P 500 is down 9.07 at 1,280.12.
Teekay Corporation (TK) and ATP Oil & Gas (ATPG) are among the stocks that are seeing notable declines in morning trading. Shares of Teekay are down 17.4 percent, while ATP's stock is dropping 9.4 percent.
Sector News
Airline stocks are turning in some of the worst performances, as the price of oil climbs $2.30 a barrel. The Amex Airline Index is currently down 3.8 percent, pulling back further from the three-month closing high set on Tuesday.
Within the airline sector, Continental Airlines (CAL) and AMR Corp. (AMR) are sharply lower. Shares of Continental are down 6.1 percent, compared to a 6.4 percent decline by AMR.
Some retail stocks are seeing considerable weakness as well. The S&P Retail Index is down 1.8 percent, adding to a loss posted in the previous session. With the decline, the index is pulling back further off the monthly high set on Tuesday.
Target (TGT) is one of the biggest losers within the retail sector after the discount retailer said that July comparable store sales declined 1.2 percent. The stock is down 3.8 percent, pulling back from a monthly closing high set in the previous session.
Other stocks that are seeing notable declines include brokerage, steel and networking stocks. The Amex Securities Broker/Dealer Index closed down 2 percent, the Amex Steel Index is down 1.2 percent and the Amex Networking Index is down 1.3 percent.
On the other hand, housing stocks have moved well off of their earlier lows after the release of the pending home sales data. The Philadelphia Housing Index is currently down 0.4 percent.
Stocks Driven By Analysts Comments
Among individual stocks, Edwards Lifesciences (EW) is seeing significant selling pressure after being downgraded at JP Morgan. The analyst downgraded the stock to an Underweight rating due to increased risk in the company's transcatheter valve program.
Shares of the medical device maker are currently trading down 10.7 percent, ending a mild uptrend. Earlier in the day, the stock set a three-month intraday low.
FirstFed Financial (FED) is also sharply lower after a Friedman Billings analyst downgraded the stock to an Underperform rating from a Market Perform rating. Furthermore, the analyst also slashed FirstFed's target price to $6 from $15. The stock is falling 2.6 percent.
On the other hand, Gerdau AmeriSteel (GNA) was upgraded to a Buy rating by an analyst at KeyBanc Capital Markets, sending the stock sharply higher. The analyst also set Gerdau's price target at $19. The stock is climbing 2.5 percent, adding to gains posted in the previous two sessions.
Other Markets
Stock markets across the Asia-Pacific region closed mostly lower despite Wall Street extending its gains on Wednesday. The Japanese market closed lower, as investors locked in profits following Wednesday's rally. The benchmark Nikkei 225 index closed down 1 percent.
Meanwhile, the major European markets are trading higher on Thursday. While the French CAC 40 Index is up 0.2 percent, the German DAX Index is gaining 0.1 percent. The U.K.'s FTSE 100 Index is advancing about 0.1 percent.
The Bank of England kept its benchmark interest rate unchanged at 5 percent at its August meeting. The decision was in-line with expectations, as economists expected the central bank to allow time for its previous policy actions to produce results.
The Bank of England's counterpart in the European Union, the European Central Bank, also announced a freeze its interest rate at 4.25 percent after raising it by 25 basis points in July. While the inflation rate in the euro zone region remains well above the central bank target of 2 percent, the bank may have been prompted to maintain rates due to evidence of slowing economic growth in the euro zone economies.
In the bond market, treasuries remain strong in morning trading, with the benchmark ten-year note trading in a range just off of its best level. Subsequently, the yield on the ten-year note is currently down 3.8 basis points at 4.01 percent.
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