Focus On Oil Prices Leads To Mixed Close On Wall Street - U.S. Commentary

(RTTNews) - Stocks fluctuated as the trading day progressed on Thursday before finishing the session mixed. The choppy trading came after the major averages showed wild swings over the course of the two previous sessions.

The major averages ended the day on opposite sides of the unchanged line. While the Dow inched up 9.38 points or 0.1 percent to 17,720.50, the S&P 500 edged down 0.35 points or less than a tenth of a percent to 2,064.11 and the Nasdaq fell 23.35 points or 0.5 percent to 4,737.33.

The volatility on Wall Street came as traders kept a close eye on the price of crude oil, which bounced back and forth across the unchanged line.

After rising as high as $47.02 a barrel in early trading, crude oil for June delivery pulled back to a low of $45.61 a barrel before rebounding to close up $0.47 at $46.70 a barrel.

Late day strength helped the price of crude oil to finish the session at a six-month closing high amid recent supply disruptions in Canada and Nigeria.

Traders were also digesting a Labor Department report showing an unexpected increase in initial jobless claims in the week ended May 7th.

The report said initial jobless claims climbed to 294,000, an increase of 20,000 from the previous week's unrevised level of 274,000. The increase surprised economists, who had expected jobless claims to edge down to 270,000.

With the unexpected increase, jobless claims rose to their highest level since reaching 310,000 in the week ended February 28, 2015.

On the heels of last Friday's disappointing monthly jobs report, the data raised some concerns about the labor market, although analysts noted the increase may primarily reflect seasonal adjustments.

"It is notoriously difficult to seasonally adjust weekly data," said Chris Low, chief economist at FTN Financial. "Watch the 4-wk average. If it remains near current levels, there's nothing to worry about. If it starts to rise in the next few weeks, it's a signal of slower employment growth to come."

The Labor Department said the four-week moving average reached 268,250 last week, an increase of 10,250 from the previous week's unrevised average of 258,000.

The notable pullback by the tech-heavy Nasdaq partly reflected a steep drop by shares of Apple (AAPL), with the tech giant tumbling 2.4 percent to its lowest closing level in nearly two years.

On Wednesday, Apple was forced to deny reports it is planning to stop offering music downloads on its iTunes service.

Sector News

While many of the major sectors ended the day showing only modest moves, substantial weakness was visible among airline stocks. The NYSE Arca Airline Index plunged by 2.6 percent to its lowest closing level in over two months.

JetBlue (JBLU) posted a notable loss after the airline reported an April load factor of 84.1 percent, down 1.6 percentage points from the same month a year ago.

Gold stocks also came under considerable selling pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 2.7 percent. The weakness in the sector came as gold for June delivery fell $4.30 to $1,271.20 an ounce.

Semiconductor, computer hardware, and biotechnology stocks also showed notable moves to the downside, contributing to the lower close by the tech-heavy Nasdaq.

On the other hand, some strength was visible among telecom and chemical stocks, although buying interest was relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index slid by 0.7 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index fell by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index slumped by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries closed modestly lower after a thirty-year bond auction attracted below average demand. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 2 basis points to 1.757 percent.

Looking Ahead

Friday will see the release of some highly anticipated U.S. economic data, with traders likely to keep a close eye on reports on retail sales, producer prices, and consumer sentiment.

Retailers Dillard's (DDS) and Nordstrom (JWN) are also releasing their quarterly results after the close of today's trading, while J.C. Penney (JCP) is due to report its results before the start of trading on Friday.