U.S. Stocks Turning In Another Lackluster Performance

Stocks have shown a lack of direction over the course of morning trading on Thursday, extending the lackluster performance seen in the previous session. The major averages are little changed following the wild swings seen in recent weeks.

Currently, the major averages are turning in another mixed performance. While the Nasdaq is up 15.02 points or 0.2 percent at 9,925.55, the Dow is down 25.62 points or 0.1 percent at 26,093.99 and the S&P 500 is down 3.40 points or 0.1 percent at 3,110.09.

The perpetuation of the choppy trading on Wall Street comes as traders digest a mixed batch of U.S. economic data.

Before the start of trading, the Labor Department released a report showing first-time claims for unemployment benefits fell by much less than expected in the week ended June 13th.

The Labor Department said initial jobless claims dropped to 1.508 million, a decrease of 58,000 from the previous week’s upwardly revised level of 1.566 million.

Economists had expected jobless claims to tumble to 1.300 million from the 1.542 million originally reported for the previous week.

Noting the latest weekly decrease reflects the smallest decline since claims began retreating from their late March peak, economists at Oxford Economics said, “The latest jobless claims data reminds us that significant stress remains in the labor market.”

Meanwhile, the Philadelphia Federal Reserve released a separate report showing an unexpected expansion in regional manufacturing activity in the month of June.

The Philly Fed said its diffusion index for current general activity soared to a positive 27.5 in June from a negative 43.1 in May, with a positive reading indicating an expansion in regional manufacturing activity.

Economists had expected the index to show a much more modest increase to a negative 23.0, which would have still indicated a contraction.

The Conference Board also released a report showing its reading on leading economic indicators rebounded by more than expected in the month of May.

The Conference Board said its leading economic index jumped by 2.8 percent in May after plunging by 6.1 percent in April and 7.5 percent in March. Economists had expected the index to climb by 1.7 percent.

Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, noted the rebound by the leading index was primarily due to initial jobless claims pulling back well off the record high set in late March.

“The improvements in labor markets, housing permits, and stock prices also buoyed the LEI, but new orders in manufacturing, consumers’ outlook on the economy, and the Leading Credit Index still point to weak economic conditions,” Ozyildirim said.

He added, “The breadth and depth of the decline in the LEI between February and April suggest the economy at large will remain in recession territory in the near term.”

Lingering concerns about a second wave of coronavirus infections may also be keeping traders on the sidelines amid the rising number of cases in Beijing as well as several U.S. states.

Beijing has reportedly closed schools and canceled flights to contain the latest coronavirus outbreak, which has purportedly led to more than 100 new confirmed cases.

Meanwhile, CNN analysis of data from Johns Hopkins University found ten U.S. states are seeing their highest seven-day average of new coronavirus cases per day since the pandemic started.

CNN said the states seeing record-high averages are Alabama, Arizona, California, Florida, Nevada, North Carolina, Oklahoma, Oregon, South Carolina and Texas.

The rising number of new cases in Oklahoma has not dissuaded President Donald Trump from plans to hold a massive indoor rally in Tulsa on Saturday.

Natural gas stocks have shown a significant move to the upside over the course of the morning, drive the NYSE Arca Natural Gas Index up by 2.4 percent. The strength in the sector comes despite a drop by the price of natural gas.

Considerable strength has also emerged among oil stocks, which are moving higher along with the price of crude oil. With crude for July delivery rising $0.46 to $38.42 a barrel, the NYSE Arca Oil Index is up by 2.2 percent.

On the other hand, gold stocks have moved to the downside amid a drop by the price of the precious metal, with the NYSE Arca Gold Bugs Index sliding by 1 percent.

Most of the other major sectors are showing more modest moves, contributing to the lackluster performance by the broader markets.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.5 percent, while Hong Kong’s Hang Seng Index edged down by 0.1 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has slid by 0.7 percent, the German DAX Index and the French CAC 40 Index are down by 1.2 percent and 1.4 percent, respectively.

In the bond market, treasuries are extending the modest upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 0.697 percent.

Source: Read Full Article