Stocks Finish Choppy Trading Session Nearly Flat - U.S. Commentary

(RTTNews) - After moving sharply higher over the course of the two previous sessions, stocks showed a lack of direction throughout the trading day on Thursday. Despite the lackluster performance, the Dow ended the session at a nearly nine-month closing high.

The major averages eventually finished the day on opposite sides of the unchanged line. While the Nasdaq edged down 1.53 points or less than 0.1 percent to 4,945.89, the Dow ticked up 18.15 points or 0.1 percent to 17,926.43 and the S&P 500 inched up 0.36 points or less than 0.1 percent to 2,082.78.

The choppy trading on Wall Street came as traders took a breather following the strong gains posted in the two previous sessions.

Traders were also digesting the latest batch of U.S. economic data, including a Labor Department report showing tame consumer price inflation.

The Labor Department said its consumer price index inched up by 0.1 percent in March after dipping by 0.2 percent in February. Economists had expected the index to rise by 0.2 percent.

Excluding food and energy prices, core consumer prices also edged up by 0.1 percent in March compared to economist estimates for a 0.2 percent increase.

On an annual basis, the pace of consumer price growth slowed to 0.9 percent in March from 1.0 in February, and the pace of core price growth slowed to 2.2 percent from 2.3 percent.

The tame inflation data added to recent speculation that the Federal Reserve will not raise interest rates at its next meeting later this month.

A separate report from the Labor Department showed an unexpected drop in initial jobless claims in the week ended April 9th.

In earnings news, financial giants Bank of America (BAC) and Wells Fargo (WFC) released their first quarter results before the start of trading.

Both Bank of America and Wells Fargo reported first quarter earnings that fell year-over-year but came in above analyst estimates.

Delta Air Lines (DAL) also released its first quarter results, reporting better than expected earnings but on revenues that missed expectations.

Sector News

While many of the major sectors ended the day showing only modest moves, gold stocks saw substantial weakness. The NYSE Arca Gold Bugs Index tumbled by 3.8 percent, pulling back further off the one-year closing high set on Tuesday.

The weakness among gold stocks came amid a steep drop by the price of the precious metal, with gold for June delivery slumping $21.80 to $1,226.50 an ounce.

Significant weakness was also visible among computer hardware stocks, as reflected by the 3.6 percent drop by the NYSE Arca Computer Hardware Index. The index fell to its lowest closing level in a month.

Seagate Technology (STX) posted a steep loss, with the disk drive maker plummeted by 20.1 percent after warning of weaker than expected third quarter results.

On the other hand, banking stocks saw considerable strength on the day, driving the KBW Nasdaq Bank Index up by 1 percent. With the gain, the index reached a three-month closing high.

Bank of America (BAC) helped to lead the banking sector higher as traders reacted positively to company's first quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 3.2 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index closed just above the unchanged line, the French CAC 40 Index and the German DAX Index climbed by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries moved modestly lower, offsetting the uptick seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 1.9 basis points to 1.781 percent.

Looking Ahead

Another batch of U.S. economic data may attract some attention on Friday, with traders likely to keep an eye on reports on industrial production, consumer sentiment, and New York manufacturing activity.

Trading could also be impacted by reaction to earnings news from financial giant Citigroup (C), which is scheduled to release its first quarter results before the start of trading.