Stocks Once Again Stage Recovery After Early Drop - U.S. Commentary

(RTTNews) - Mirroring the performance seen in the previous session, stocks have regained some ground over the course of morning trading on Thursday after initially coming under pressure. The major averages have climbed well off their worst levels but remain in the red.

Currently, the major averages are posting modest losses on the day. The Dow is down 31.23 points or 0.2 percent at 17,758.44, the Nasdaq is down 8.08 points or 0.2 percent at 4,944.17 and the S&P 500 is down 5.00 points or 0.2 percent at 2,094.33.

A decrease by the price of crude oil weighed on the markets early in the session, with energy stocks leading the way lower.

Crude oil for July delivery is currently down $0.79 at $48.22 a barrel after an OPEC meeting failed to result in an agreement on a new output target.

Despite the subsequent recovery attempt by the broader markets, substantial weakness remains visible among oil service stocks. Reflecting the weakness in the sector, the Philadelphia Oil Service Index is down by 2.8 percent.

Natural gas and software stocks also continue to see notable weakness on the day, while strength has emerged among biotechnology and networking stocks.

Meanwhile, most of the major sectors are showing only modest as traders look ahead to the release of the closely watched monthly jobs report on Friday.

The Labor Department report is expected to show an increase of about 158,000 jobs in May, while the unemployment rate is expected to edge down to 4.9 percent.

The highly anticipated jobs data could have a significant impact on the outlook for whether the Federal Reserve raises interest rates later this month.

Payroll processor ADP released a report this morning showing that private sector employment increased roughly in line with economist estimates in the month of May.

The report said private sector employment rose by 173,000 jobs in May after climbing by an upwardly revised 166,000 jobs in April.

Economists had expected employment to increase by about 175,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.

Analysts have noted the Labor Department data will reflect the impact of a recent strike by Verizon (VZ) workers, which did not affect the ADP data.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index tumbled by 2.3 percent, Hong Kong's Hang Seng Index advanced by 0.5 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is down by 0.3 percent, the U.K.'s FTSE 100 and the German DAX Index are both just above the unchanged line.

In the bond market, treasuries have shown a notable move back to the upside after ending the previous session slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.4 basis points at 1.802 percent.