Stocks have climbed well off of their session lows but remain mostly negative in mid-afternoon trading on Thursday. The markets came under pressure earlier in the session after comments from St. Louis Federal Reserve Bank President James Bullard.
Bullard spooked the markets when he said that the Fed's current policies are putting the U.S. at risk for "a Japanese-style deflationary outcome within the next several years."
While Bullard said the most likely course for the U.S. economy is a gradual recovery, he said that if prices, drop the Fed should think about buying more Treasury securities instead of promising to keep interest rates low for an "extended period."
Early gains in equities came as the markets focused on a decline in jobless claims and the silver lining in a mixed bag of earnings reports.
On the economic front, the Labor Department released a report showing that jobless claims in the week ended July 24th dropped to 457,000 from the previous week's revised figure of 468,000. Economists had been expecting jobless claims to edge down to 460,000 from the 464,000 originally reported for the previous week.
In earnings news, Exxon Mobil Corp. (XOM) and Colgate-Palmolive Co. (CL) both beat second quarter earnings estimates but fell short of revenue expectations. Meanwhile, Motorola Inc. (MOT) reported adjusted second-quarter earnings and sales that were ahead of estimates.
After the markets closed for trading in the previous session, Japanese electronics giant Sony Corp. (SNE) reported a profit for the first quarter of fiscal 2011 compared to a loss in the same period last year. The company also raised its full year earnings guidance.
The major averages are currently posting modest losses, well off their worst levels of the day. The Dow is down 26.56 points or 0.3 percent at 10,471.32, the Nasdaq is down 8.41 points or 0.4 percent at 2,256.15 and the S&P 500 is down 4.18 points or 0.4 percent at 1,101.95.
Dow Components
While the Dow components are roughly mixed, notable losses by some of the blue chip stocks are helping to keep the index in the red.
Kraft (KFT) is notably lower in mid-afternoon trading, posting a loss of 2.4 percent and pulling back further off of Tuesday's five-week closing high.
AT&T (T) is also down by a significant margin, slipping by 1 percent. The drop is pulling the stock down off the nearly three-month closing high set in the previous session.
Procter & Gamble (PG), Intel (INTC) and Hewlett Packard (HPQ) are also weighing on the Dow, while a strong gain by Microsoft (MSFT) is helping to offset some of the downside. Microsoft is up by 1.3 percent and on pace for a six-week closing high.
DuPont (DD), Merck (MRK) and Pfizer (PFE) are moderately higher, further helping to soften the retreat by the Dow.
Sector News
Networking stocks remain under pressure in mid-afternoon trading, with the NYSE Arca Networking Index down by 2.4 percent. Within the sector Emulex (ELX) is down by 3.9 percent and on pace for a one-year closing low.
Semiconductor, computer hardware and electronic storage stocks are also down after FBR Capital Markets downgraded tech stalwarts Nvidia Corp. (NVDA) and Advanced Micro Devices (AMD).
While notable weakness also remains visible among utilities stocks, brokerage, oil service, and gold stocks are showing strong moves to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region saw a mixed close on Thursday. Japan's benchmark Nikkei 225 inched fell by 0.6 percent, Hong Kong's Hang Seng Index was nearly flat and India's BSE 30 Index gained 0.2 percent.
Meanwhile, the major European markets all ended the day in the red after seeing a late-day sell off. The U.K.'s FTSE 100 Index slid by 0.1 percent, while the French CAC 40 Index and the German DAX Index fell by 0.5 percent and 0.7 percent, respectively.
In the bond markets, treasuries are little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 3.007 percent, posting a gain of less than one basis point.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.