Stocks Close Mixed For Second Consecutive Session - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction over the course of the trading day on Thursday, as traders weighed mostly positive catalysts against concerns about valuations. The major averages bounced back and forth across the unchanged line before closing mixed for the second straight day.

After climbing above its record closing high, the Dow gave back some ground but still closed up 32.43 points or 0.2 percent at 16,550.97. On the other hand, the Nasdaq fell 16.18 points or 0.4 percent to 4,051.50 and the S&P 500 dipped 2.58 points or 0.1 percent to 1,875.63.

The lackluster performance on Wall Street came despite the release of a report from the Labor Department showing that jobless claims pulled back by more than expected in the week ended May 3rd.

The Labor Department said jobless claims fell to 319,000, a decrease of 26,000 from the previous week's revised level of 345,000. Economists had expected jobless claims to drop to 325,000.

Peter Boockvar, managing director at the Lindsey Group, said, "The lower than expected print in claims confirms the low 300,000 claims trend we've been seeing since the excessive snow stopped falling, with claims hovering around the lowest since 2007."

"The labor market continues its upward pace but the question remains as to whether we're on the cusp of a new acceleration or are just back to the pre-winter trend," he added.

Meanwhile, upbeat Chinese trade data contributed to some strength in the overseas markets earlier in the day, but the positive sentiment did not see much carry over in the U.S.

The report showed that the Chinese trade surplus widened to $18.5 billion in April. Exports rose 0.9 percent year-over-year and imports climbed 0.8 percent, while economists had forecast declines for both imports and exports.

Traders also largely shrugged off remarks by European Central Bank President Mario Draghi indicating that the bank is ready to cut interest rates next month.

Concerns about valuations helped to keep buying interest subdued amid questions about whether the outlook for the economy supports new record highs for the markets.

Sector News

While many of the major sectors ended the day showing only modest moves, considerable weakness was visible among biotechnology stocks. The NYSE Arca Biotechnology Index fell by 1.9 percent, adding to the loss posted in the two previous sessions.

InterMune (ITMN) and ImmunoGen (IMGN) turned in two of the biotech sector's worst performances, falling by 4 percent and 3.7 percent, respectively.

Natural gas stocks also came under pressure on the day, dragging the NYSE Arca Natural Gas Index down by 1.6 percent. The pullback by the index came after it ended the previous session at a record closing high.

Oil service, brokerage, and utilities stocks also saw notable weakness, while strength was visible among semiconductor and telecom stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 0.9 percent following yesterday's sell-off, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also moved to the upside over the course of the session. While the French CAC 40 Index jumped by 1.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index climbed by 0.9 percent and 0.6 percent, respectively.

In the bond market, treasuries saw some volatility on the day before eventually closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.2 basis points to 2.602 percent.

Looking Ahead

Amid a relatively quiet day on the U.S. economic front, trading on Friday may be somewhat subdued. The Commerce Department is due to release it report on wholesale inventories in March, but the data is not likely to attract much attention.

Trading could be impacted by reaction to earnings news from CBS (CBS), News Corp (NWS), Nvidia (NVDA), and Symantec (SYMC), which are among the companies reporting their quarterly result after the close of today's trading.