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Major Averages Turn Mixed After Early Move To The Downside - U.S. Commentary

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After falling sharply early in the session, stocks have staged a recovery attempt over the course of the trading day on Thursday. The major averages have bounced well off their lows of the session, with the Nasdaq and the S&P 500 climbing into positive territory.

Currently, the major averages are turning in a mixed performance. While the Dow is down 67.47 points or 0.3 percent at 25,013.03, the Nasdaq is up 30.61 points or 0.4 percent at 7,167.00 and the S&P 500 is up 1.29 points or 0.1 percent at 2,702.87.

The early weakness on Wall Street reflected lingering concerns about the global economic outlook along with the resignation of U.K. Brexit Secretary Dominic Raab.

Selling pressure waned over the course of the morning, however, inspiring traders to go bargain hunting following a recent downtrend.

Traders are also digesting a slew of U.S. economic data, including reports on retail sales and weekly jobless claims.

Retail sales in the U.S. increased by more than anticipated in the month of October, the Commerce Department revealed in a report.

The Commerce Department said retail sales advanced by 0.8 percent in October following a revised 0.1 percent dip in September.

Economists had expected retail sales to climb by 0.5 percent compared to the 0.1 percent uptick originally reported for the previous month.

Excluding a jump in auto sales, retail sales still rose by 0.7 percent in October after edging down by 0.1 percent in September. Ex-auto sales had been expected to increase by 0.5 percent.

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, rose by 0.3 percent in October, matching the downwardly revise increase in September.

"The plunge in oil prices in recent weeks will boost households' real disposable incomes by close to $40 billion, with surging natural gas prices likely to offset only a small fraction of that improvement in purchasing power," said Michael Pearce, Senior U.S. Economist at Capital Economics.

"With consumer confidence still high, much of this extra cash is likely to filter through to spending on other goods and services," he added. "But we doubt that will be enough to replace the boost from the earlier fiscal stimulus or offset all of the headwind from tighter monetary policy."

A separate report from the Labor Department showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended November 10th.

The report said initial jobless claims inched up to 216,000, an increase of 2,000 from the previous week's unrevised level of 214,000. Economists had expected jobless claims to edge down to 212,000.

The Labor Department also released a report showing import and export prices both rose by more than expected in the month of October.

The Labor Department said import prices climbed by 0.5 percent in October after rising by a downwardly revised 0.2 in September.

Economists had expected import prices to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.

The report also said export prices rose by 0.4 percent in October after coming in unchanged in September. Export prices had also been expected to tick up by 0.1 percent.

Reports released by the Federal Reserve Banks of New York and Philadelphia showed mixed readings on the pace of growth in regional manufacturing activity in the month of November.

Sector News

Semiconductor stocks have shown a substantial move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent.

Significant strength has also emerged among biotechnology stocks, as reflected by the 1.7 percent advance by the NYSE Arca Biotechnology Index. The index is bouncing off a seven-month closing low.

Steel, gold, and networking stocks are also seeing notable strength in mid-day trading, contributing to the recovery attempt by the broader markets.

On the other hand, housing stocks have climbed off their worst levels but continue to see considerable weakness, with the Philadelphia Housing Sector Index down by 1.4 percent.

Continued weakness among retail and utilities stocks has also partly offset the strength that has emerged in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index surged up by 1.8 percent.

Meanwhile, European stocks moved mostly lower, although the U.K's FTSE 100 Index bucked the downtrend and inched up by 0.1 percent. The French CAC 40 Index and the German DAX Index fell by 0.7 percent and 0.5 percent, respectively.

In the bond market, treasuries have pulled back off their highs of the session but remain positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 3.099 percent.

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