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Stocks Continue To Turn In Lackluster Performance - U.S. Commentary

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With traders continuing to express uncertainty about a potential U.S.-China trade deal, stocks continue to show a lack of direction in mid-day trading on Thursday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in mixed performance. While the Nasdaq is down 23.12 points or 0.3 percent at 7,075.20, the Dow is up 67.54 points or 0.3 percent at 24,594.81 and the S&P 500 is up 0.64 points or less than a tenth of a percent at 2,651.71.

The choppy trading on Wall Street comes as traders continue to waffle between optimism and skepticism about a potential trade deal with China.

Early buying interest was generated after a report from Reuters indicating some Chinese state-owned companies purchased U.S. soybeans for the first time in more than six months was seen as evidence China is making good on its pledges to the U.S.

Reuters also said China appears to be easing its high-tech industrial push, dubbed "Made in China 2025," which has long irked Washington.

However, traders remain somewhat skeptical the U.S. and China will manage to reach a long-term trade agreement amid ongoing disputes over intellectual property and other key issues.

On the U.S. economic front, the Labor Department released a report showing a much steeper than expected drop in initial jobless claims in the week ended December 8th.

The report said initial jobless claims fell to 206,000, a decrease of 27,000 from the previous week's revised level of 233,000. Economists had expected jobless claims to slip to 225,000.

Jobless claims pulled back further off the nearly eight-month high reached two weeks ago to hit their lowest level in almost three months.

A separate report from the Labor Department showed import prices plunged by much more than expected in the month of November amid a steep drop in fuel prices.

The report said import prices plummeted by 1.6 percent in November after climbing by 0.5 percent in October. Economists had expected import prices to slump by 0.9 percent.

Additionally, the Labor Department said export prices tumbled by 0.9 percent in November following an upwardly revised 0.5 percent advance in October.

Export prices had been expected to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Transportation stocks are seeing considerable weakness, however, with the Dow Jones Transportation Average falling by 1.6 percent to its lowest intraday level in a year.

Considerable weakness is also visible among oil service stocks, as reflected by the 1.5 percent drop by the Philadelphia Oil Service Index. The weakness among oil service stocks comes despite an increase by the price of crude oil.

Biotechnology and banking stocks have also moved to the downside on the day, while interest rate-sensitive utilities and commercial real estate stocks are seeing notable strength.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 1.3 percent.

Meanwhile, the major European markets moved modestly lower on the day. While the French CAC 40 Index dipped by 0.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both closed just below the unchanged line.

In the bond market, treasuries have moved mostly lower after showing a lack of direction earlier in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 2.919 percent.

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