U.S. Stocks Continue To See Modest Weakness In Afternoon Trading

Stocks have fluctuated over the course of the trading session on Thursday but largely maintained a modestly negative bias. The major averages have edged lower following the strong upward move seen throughout much of November thus far.

Currently, the major averages are in the red but off their lows of the session. The Dow is down 132.13 points or 0.4 percent at 34,859.08, the Nasdaq is down 26.08 points or 0.2 percent at 14,077.75 and the S&P 500 is down 5.56 points or 0.1 percent at 4,497.32.

A negative reaction to earnings news from Walmart (WMT) is weighing on Wall Street, with the retail giant plunging by 8.0 percent.

Walmart reported better than expected fiscal third quarter results but forecast full-year earnings toward the low end of analyst estimates.

Networking giant Cisco Systems (CSCO) has also moved sharply lower after reporting fiscal first quarter results that beat estimates but cutting its full-year revenue forecast.

Selling pressure has remained relatively subdued, however, as the latest batch of U.S. economic data has added to recent optimism about the outlook for interest rates.

The Labor Department released a report showing U.S. import and export prices both fell by more than expected in the month of October, capping off an encouraging week of inflation data.

The report said import prices slid by 0.8 percent in October after climbing by an upwardly revised 0.4 percent in September.

Economists had expected import prices to decrease by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Labor Department said export prices slumped by 1.1 percent in October after rising by a downwardly revised 0.5 percent in September.

Export prices were expected to decline by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.

A separate Labor Department report showing initial jobless claims climbed by much more than expected in the week ended November 11th.

The Labor Department said initial jobless claims rose to 231,000, an increase of 13,000 from the previous week’s revised level of 218,000.

Economists had expected jobless claims to inch up to 220,000 from the 217,000 originally reported for the previous week.

With the bigger than expected, jobless claims reached their highest level since hitting 232,000 in the week ended August 19th.

“The claims data are consistent with a job market that is cooling enough to keep rate hikes off the table, but too strong to make rate cuts a consideration any time soon,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, “The Fed is surely encouraged by recent inflation data but needs to see a further slowdown in the labor market and wage growth to be persuaded that inflation is on a sustainable path back to 2%.”

The Federal Reserve also released a report showing industrial production fell by more than expected in October due in part to the strikes at several major motor vehicle manufacturers

Sector News

Energy stocks are seeing substantial weakness on the day, with a steep drop by the price of crude oil weighing the sector.

With crude for December delivery plummeting $4.09 to $72.57 a barrel, the Philadelphia Oil Service Index is down by 4.4 percent and the NYSE Arca Oil Index is down by 3.2 percent.

Cisco is leading the networking sector lower on the day, dragging the NYSE Arca Networking Index down 3.7 percent. The index ended Wednesday’s trading at its best closing level in over a month.

Palo Alto Networks (PANW) is also posting a steep loss after reporting better than expected fiscal first quarter earnings but provided disappointing billings guidance.

Airline, retail and computer hardware stocks are also seeing notable weakness, while gold stocks have moved higher along with the price of the precious metal.

Other 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 0.3 percent, while Hong Kong’s Hang Seng Index tumbled by 1.4 percent.

Most European stocks also moved to the downside on the day. The U.K.’s FTSE 100 Index slumped by 1.0 percent and the French CAC 40 Index slid by 0.6 percent, although the German DAX Index bucked the downtrend and edged up by 0.2 percent.

In the bond market, treasuries have rebounded following the pullback 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 9.0 basis points at 4.445 percent.

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