Stocks Continue To See Modest Weakness In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving to the downside early in the session, stocks continue to see modest weakness in mid-day trading on Thursday. Selling pressure has remained relatively subdued, however, limiting the downside for the markets.

While the Dow briefly peeked above the unchanged line in recent trading, the major averages are currently all in the red. The Dow is down 22.09 points or 0.1 percent at 18,090.52, the Nasdaq is down 5.66 points or 0.1 percent at 5,005.36 and the S&P 500 is down 3.10 points or 0.2 percent at 2,103.53.

The weakness on Wall Street may be partly due to profit taking following the upward trend seen throughout early April.

With the gains posted in the previous session, the major averages ended the day at their best closing levels in almost a month.

Another batch of disappointing economic data is also weighing on the markets, with a report from the Commerce Department showing a much smaller than expected rebound in housing starts.

While the report said housing starts rose 2.0 percent to an annual rate of 926,000 in March, economists had been expecting starts to jump to a rate of 1.04 million.

The Commerce Department also said building permits, an indicator of future housing demand, fell 5.7 percent to an annual rate of 1.039 million in March.

Rob Carnell, chief international economist at ING, said the pullback in building permits suggests "we might be wasting our time holding out for an April bounce."

"The June rate hike scenario seems dead and buried," Carnell said. "But a continuation of data like this means that even September cannot be taken for granted unless we see a marked firming in the numbers."

A separate report from the Labor Department showed an unexpected increase in initial jobless claims in the week ended April 11th.

As mentioned above, however, selling pressure has remained subdued due in part to upbeat earnings news from big-name companies such as Citigroup (C), Goldman Sachs (GS), and UnitedHealth (UNH).

Shares of Netflix (NFLX) have shown a particularly strong upward move after the streaming video service provider said it added nearly 5 million new subscribers in the first quarter.

Sector News

After seeing substantial strength in the previous session, oil service stocks have shown a notable move back to the downside on the day. The Philadelphia Oil Service Index is falling by 1.7 percent after ending Wednesday's trading at its best closing level in well over four months.

The weakness among oil service stocks comes amid a pullback by the price of crude oil, with crude for May delivery sliding $0.73 to $55.66 a barrel after soaring $3.10 to $56.39 a barrel on Wednesday.

Housing stocks have also come under pressure on the heels of the disappointing housing starts data, dragging the Philadelphia Housing Sector Index down by 1.3 percent. Hovnanian (HOV) and Toll Brothers (TOL) are posting steep losses.

Steel, gold, and utilities stocks are also seeing significant weakness in mid-day trading, while considerable strength is visible among tobacco and airline stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index tumbled by 1.9 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index dropped by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries have turned lower over the course of the session after seeing initial strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 1.923 percent.