Stocks Seeing Modest Strength In Mid-Day Trading - U.S. Commentary

(RTTNews) - While buying interest has remained relatively subdued, stocks are seeing modest strength in mid-day trading on Thursday. The gains on the day have largely offset the pullback that was seen late in the previous session.

The major averages are currently posting slim gains, off their highs for the session. The Dow is up 18.27 points or 0.1 percent at 16,651.45, the Nasdaq is up 12.02 points or 0.3 percent at 4,237.09 and the S&P 500 is up 3.82 points or 0.2 percent at 1,913.60.

The modest strength on Wall Street reflects a positive reaction to the mixed batch of economic data released this morning, including a report from the Labor Department showing a bigger than expected drop in initial jobless claims.

The report said initial jobless claims fell 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.

With the bigger than expected decrease, jobless claims pulled back near the seven-year low of 298,000 set in the week ended May 10th.

Meanwhile, a separate report from the Commerce Department showed that GDP fell by 1.0 percent in the first quarter compared to the initial estimate for a 0.1 percent uptick.

The drop marked the first contraction in GDP since the first quarter of 2011 and was steeper than the 0.5 percent drop expected by economists.

The first quarter data was largely viewed as old news, however, with traders generally expecting a rebound in activity in the second quarter.

In other economic news, the National Association of Realtors released a 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.

Sector News

A majority of the major sector indices have moved to the upside on the day, although most continue to show only modest moves.

While some strength has emerged among tobacco, oil service, and gold stocks, buying interest has remained relatively subdued.

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 edged up by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index both closed just below the unchanged line.

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 basis points at 2.418 percent.