Stocks Finish Lackluster Session Nearly Flat - U.S. Commentary

(RTTNews) - Following the substantial rally seen in the previous session, stocks showed a lack of direction throughout the trading day on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session slightly lower. The Dow slipped 4.41 points or less than 0.1 percent to 17,732.75, the Nasdaq edged down 1.56 points or less than 0.1 percent to 5,073.64 and the S&P 500 dipped 2.34 points or 0.1 percent to 2,081.24.

The choppy trading on Wall Street came as traders took a breather on the heels of the volatility seen over the past few sessions.

The rally seen on Wednesday extended the strong upward move seen on Monday, nearly offsetting the sharp pullback seen last week.

Traders were also digesting the latest batch of U.S. economic news, including a report from the Labor Department showing a modest drop in initial jobless claims in the week ended November 14th.

The report said initial jobless claims edged down to 271,000, a decrease of 5,000 from the previous week's unrevised level of 276,000. Economists had expected jobless claims to dip to 270,000.

A separate report from the Philadelphia Federal Reserve said regional manufacturing conditions have seen a slight improvement in the month of November.

The Philly Fed said its diffusion index for current activity rose to a positive 1.9 in November from a negative 4.5 in October.

The positive reading indicated growth in regional manufacturing activity after two months of contraction. The index had been expected to rise to a negative 0.5.

Additionally, the Conference Board released a report showing a slightly bigger than expected increase by its index of leading economic indicators in the month of October.

The Conference Board said its leading economic index climbed by 0.6 percent in October after edging down by a revised 0.1 percent in September. Economists had expected the index to rise by 0.5 percent.

Sector News

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

Gold stocks saw significant strength, however, with the NYSE Arca Gold Bugs Index surging up by 3.4 percent. The strength in the sector comes as gold for December delivery climbed $9.20 to $1,077.90 an ounce.

Airline and railroad stocks also turned in strong performances, driving the NYSE Arca Airline Index and the Dow Jones Railroads Average up by 1.8 percent and 1.7 percent, respectively.

On the other hand, oil service stocks moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 2.2 percent. The weakness in the sector came as crude oil for December delivery slipped $0.21 to $40.54 a barrel.

Healthcare, biotechnology, and electronic storage stocks also moved to the downside, offsetting the strength seen in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher on Thursday on the heels of the overnight rally on Wall Street. Japan's Nikkei 225 Index surged up by 1.1 percent, while Hong Kong's Hang Seng Index jumped by 1.4 percent.

The major European markets also moved to the upside on the day. While the German DAX Index shot up by 1.1 percent, the U.K.'s FTSE 100 Index advanced by 0.8 percent and the French CAC 40 Index edged up by 0.2 percent.

In the bond market, treasuries moved moderately higher after ending the previous session little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.1 basis points to 2.248 percent.

Looking Ahead

Friday represents a quiet day on the U.S. economic front, although traders are likely to keep an eye on a speech by St. Louis Federal Reserve President James Bullard.