Stocks Close Nearly Flat After Recovering From Early Weakness - U.S. Commentary

(RTTNews) - Stocks saw modest weakness for much of the trading day on Thursday before recovering late in the session and closing nearly flat. The lackluster close extended the roughly sideways trend shown by the markets over the past several sessions.

The major average ended the day on opposite sides of the unchanged line. While the Dow edged down 19.71 points or 0.1 percent to 17,049.00, the Nasdaq crept up 5.28 points or 0.1 percent to 4,591.81 and the S&P 500 inched up 1.76 points or 0.1 percent to 1,997.45.

The modest weakness seen for most of the day came following the release of a report from the Labor Department showing an unexpected increase in initial jobless claims in the week ended September 6th.

The Labor Department said initial jobless claims climbed to 315,000, an increase of 11,000 from the previous week's revised level of 304,000. Economists had expected claims to edge down to 300,000.

The unexpected increase in jobless claims came on the heels of last week's disappointing monthly jobs report, although the Labor Department noted that the weekly data was likely impacted by the Labor Day holiday last Monday.

Geopolitical concerns also weighed on the markets after President Barack Obama confirmed that the U.S. will expand its military campaign against the terrorist group known as the Islamic State.

Obama said the U.S. would degrade and the ultimately destroy the group through a comprehensive and sustained counter-terrorism strategy that includes airstrikes in both Iraq and Syria.

Nonetheless, traders seemed reluctant to make any significant moves ahead of the release of some key economic data on Friday, including the closely watched retail sales report.

The late-day recovery by the markets was partly attributed to a rally by the price of oil, with crude for October delivery jumping $1.16 to $92.83 a barrel.

Among individual stocks, shares of Lululemon Athletica (LULU) moved sharply higher on the day after the yogawear maker reported better than expected second quarter results.

Network equipment maker JDS Uniphase (JDSU) also turned in a strong performance after announcing plans to split into two separate publicly traded companies.

On the other hand, shares of Men's Wearhouse (MW) moved to the downside after the menswear retail chain reported second quarter sales that came in below analyst estimates.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

While strength emerged among steel, brokerage, and utilities stocks, notable weakness remained visible in the biotechnology sector.

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 advanced by 0.8 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index dropped by 0.5 percent, the French CAC 40 Index and the German DAX Index dipped by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries closed nearly flat after seeing modest strength for much of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.531 percent.

Looking Ahead

Reaction to the Commerce Department's retail sales report is likely to drive trading on Friday, although investors are also likely to keep an eye on reports on import and export prices and consumer sentiment.