Disappointing Sales Data, Iraq Worries Weighing On Wall Street - U.S. Commentary

(RTTNews) - After ending the previous session mostly lower, stocks are seeing some further downside during trading on Thursday. Disappointing retail sales data is weighing on the markets along with news of Islamic militants seizing control of significant parts of Iraq.

Currently, the major averages are posting moderate losses, off their worst levels of the day. The Dow is down 56.38 points or 0.3 percent at 16,787.50, the Nasdaq is down 13.09 points or 0.3 percent at 4,318.85 and the S&P 500 is down 6.63 points or 0.3 percent at 1,937.26.

The weakness on Wall Street is partly due to the release of a report from the Commerce Department showing that retail sales rose by less than expected in the month of May.

The Commerce Department said retail sales rose by 0.3 percent in May, while economists had been expecting sales to climb by about 0.6 percent.

Traders seem to have shrugged off a notable upward revision to April sales, which rose by 0.5 percent compared to the 0.1 percent uptick originally reported for the month.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the May miss relative to expectations was offset by the revision higher in April, thus leaving Q2 GDP estimates the same."

A report from the Labor Department showing an unexpected increase in weekly jobless claims has also generated some negative sentiment.

The report said initial jobless claims edged up to 317,000 in the week ended June 7th from the previous week's revised level of 313,000. Economists had expected jobless claims to dip to 310,000.

The Labor Department also released a separate report showing modest increases in import and export prices in May, while the Commerce Department reported a bigger than expected increase in business inventories in April.

Geopolitical concerns are also weighing on the markets amid news that militants have seized control of two major cities in Iraq and are on the march toward Baghdad.

Sector News

After helping to lead the markets lower on Wednesday, airline stocks are once again seeing substantial weakness on the day. The NYSE Arca Airline Index has tumbled by 2.9 percent, pulling back further off last Friday's twelve-year closing high.

The continued weakness in the oil-sensitive airline sector is partly due to a jump by the price of crude oil in response to news out of Iraq.

Steel stocks have also moved notably lower over the course of the session, dragging the NYSE Arca Steel Index down by 1.6 percent. Cliffs Natural Resources (CLF) and AK Steel (AKS) are turning in two of the sector's worst performances.

Railroad, retail, and defense stocks are also seeing some weakness in mid-day trading, while gold stocks are once again bucking the downtrend amid an increase by 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 0.6 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.

Meanwhile, the major European markets turned in a lackluster performance on the day and closed nearly flat. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index closed just below the unchanged line and the German DAX Index dipped by 0.1 percent.

In the bond market, treasuries have moved modestly higher after showing a lack of direction earlier in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 2.624 percent.