Stocks Move Mostly Higher Amid Easing Rate Hike Worries - U.S. Commentary

(RTTNews) - Following the release of a slew of U.S. economic data, stocks have moved mostly higher in early trading on Thursday. The major averages have all climbed into positive territory after ending the previous session on opposite sides of the unchanged line.

In the past few minutes, the major averages have pulled back off their highs for the young session, but they remain positive. The Dow is up 51.63 points or 0.3 percent at 18,086.40, the Nasdaq is up 32.81 points or 0.6 percent at 5,206.58 and the S&P 500 is up 6.17 points or 0.3 percent at 2,131.94.

The early strength on Wall Street may reflect easing concerns about a near-term interest rate hike by the Federal Reserve following the release of some weak economic data.

Before the start of trading, the Commerce Department released a report showing that retail sales fell more than expected in the month of August.

The Commerce Department said retail sales dipped by 0.3 percent in August following a revised 0.1 percent uptick in July. Retail sales had been expected to slip by 0.1 percent.

Excluding a drop in auto sales, the report said retail sales edged down by 0.1 percent in August after falling by 0.4 percent in July. Economists had expected ex-auto sales to rise by 0.3 percent.

A separate report from the Fed showed that industrial production also fell by more than expected in August amid pullbacks in manufacturing and utilities output.

The report said industrial production dropped by 0.4 percent in August after climbing by a revised 0.6 percent in July. Economists had expected production to dip by 0.2 percent.

Steve Murphy and Andrew Hunter, U.S. Economists at Capital Economics, said the weak retail sales and production data suggest third quarter GDP growth may weaker than hoped, which they said is another reason for the Fed to pass on raising interest rates next week.

"Overall, we expect GDP growth will be around 2.5% annualized in the third quarter, although the balance of risks to that forecast probably now lie to the downside," Murphy and Hunter said.

A Labor Department report showing tame producer price inflation has also helped to reinforce expectations that the Fed will leave rates unchanged.

Semiconductor stocks have shown a strong move to the upside in early trading, driving the Philadelphia Semiconductor Index up by 1.5 percent. Skyworks Solutions (SWKS) is posting a standout gain.

Brokerage, computer hardware, and networking stocks are also seeing early strength moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.3 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.5 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is down by 0.3 percent.

In the bond market, treasuries have moved back to the downside following the rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 1.708 percent.