Major Averages Close Modestly Lower Following Choppy Session - U.S. Commentary

(RTTNews) - After failing to sustain an initial move to the upside, stocks showed a lack of direction over the course of the trading session on Thursday. The major averages spent much of the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session modestly lower. The Dow slipped 28.69 points or 0.1 percent to 21,783.40, the Nasdaq edged down 7.08 points or 0.1 percent to 6,271.33 and the S&P 500 dipped 5.07 points or 0.2 percent to 2,438.97.

The choppy trading on Wall Street came as came as traders looked ahead to the Federal Reserve's Economic Policy Symposium in Jackson Hole, Wyoming, which gets underway later today.

Fed Chair Janet Yellen and European Central Bank President Mario Draghi are both scheduled to speak at the conference on Friday.

Speaking to CNBC from the symposium, Kansas City Fed President Esther George said the economy is strong enough to handle more interest rate hikes, despite recent weak inflation readings.

"I think we should continue with the gradual rate path," George said. "While we haven't hit 2 percent, I'm reminded that 2 percent is a target over the long term."

She added, "In the context of a growing economy, of jobs being added, I don't think it's an issue that we should be particularly concerned about unless we see something change."

On the U.S. economic front, the Labor Department released a report showing a modest uptick in initial jobless claims in the week ended August 19th.

The report said initial jobless claims inched up to 234,000, an increase of 2,000 from the previous week's unrevised level of 232,000. Economists had expected jobless claims to rise to 238,000.

Meanwhile, a separate report from the National Association of Realtors unexpectedly showed a continued decrease in existing home sales in the month of July.

NAR said existing home sales fell by 1.3 percent to an annual rate of 5.44 million in July after tumbling by 2 percent to a downwardly revised 5.51 million in June.

The continued decrease surprised economists, who had expected existing home sales to climb to an annual rate of 5.57 million in July from the 5.52 million originally reported for the previous month.

With the unexpected decrease, existing home sales dropped to their lowest annual rate since hitting 5.34 million last August.

The disappointing existing home sales data came on the heels of the release of a Commerce Department report on Wednesday showing an unexpected drop in new home sales in July.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Airline stocks saw notable weakness, however, extending a recent downward trend. The NYSE Arca Airline Index fell by 1 percent to its lowest closing level in nine months.

American Airlines (AAL), United Continental (UAL), and Delta Air Lines (DAL) turned in some of the sector's worst performances on the day.

On the other hand, biotechnology stocks showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.4 percent. Arrowhead Pharmaceuticals (ARWR) led the way higher.

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 slid by 0.4 percent, while Hong Kong's Hang Seng Index climbed by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index closed just below the unchanged line, the German DAX Index inched up by 0.1 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.

In the bond market, treasuries saw modest weakness following the notable upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 2.194 percent.

Looking Ahead

The speeches by Yellen and Draghi are likely to be in focus on Friday, potentially overshadowing a report on durable goods orders in the month of July.

On the earnings front, Autodesk (ADSK), Broadcom (AVGO), GameStop (GME), and Ulta Beauty (ULTA) are among the companies releasing their quarterly results after the close of today's trading.

Discount retailer Big Lots (BIG) is also scheduled to release its second quarter results before the start of trading on Friday.