Mixed Economic Data Leads To Choppy Trading On Wall Street - U.S. Commentary

(RTTNews) - With trader digesting a mixed batch of U.S. economic data, stocks are turning in a lackluster performance in early trading on Thursday. The major averages initially moved moderately higher but have pulled back near the unchanged line since then.

Currently, the major averages are turning in a mixed performance. While the Dow is down 0.94 points or less than a tenth of a percent at 16,632.24, the Nasdaq is up 6.74 points or 0.2 percent at 4,231.82 and the S&P 500 is up 1.38 points or 0.1 percent at 1,911.16.

The choppy trading on Wall Street comes as the mixed data has added to uncertainty about the near-term outlook for the markets.

Reports showing a contraction in first quarter GDP and a smaller than expected increase in pending home sales have helped to offset the positive sentiment generated by a separate report showing a bigger than expected drop in initial jobless claims.

Before the start of trading, the Commerce Department released revised data showing that GDP decreased by 1.0 percent in the first quarter compared to the initial estimate for a 0.1 percent uptick. The revised data had been expected to show a smaller contraction of about 0.5 percent.

With the downward revision, U.S. GDP contracted for the first time since the 1.3 percent decrease seen in the first quarter of 2011.

The bigger than expected drop primarily reflected a downward revision to private inventory investment and an upward revision to imports, which are a subtraction in the calculation of GDP.

Recently, the National Association of Realtors released a separate report showing that pending home sales increased for the second consecutive month in April, although pending sales rose by much less than economists had anticipated.

NAR said its pending home sales index rose 0.4 percent to 97.8 in April after jumping 3.4 percent to 97.4 in March. Economists had expected the index to climb by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Meanwhile, the Labor Department released a report showing that initial jobless claims dropped to 300,000 in the week ended May 24th, a decrease of 27,000 from the previous week's revised level of 327,000.

Economists had been expecting jobless claims to dip to 317,000 from the 326,000 originally reported for the previous week.

Contributing to the lack of direction being shown by the broader markets, most of the major sectors are also showing only modest moves.

While some strength is visible among airline and tobacco stocks, steel stocks are extending the downward move seen in the previous session.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index has risen by 0.3 percent, the French CAC 40 Index and the German DAX Index are down by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries are seeing further upside after ending the previous session sharply higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 2.411 percent.