U.S. Stocks Give Back Ground After Early Move To The Upside

(RTTNews) - After moving mostly higher early in the session, stocks have given back ground over the course of the trading day on Thursday. The major averages have pulled back well off their highs of the session, with the Dow briefly dipping into negative territory.

Currently, the tech-heavy Nasdaq is up 58.82 points or 0.5 percent at 11,985.05 and the S&P 500 is up 11.17 points or 0.3 percent at 4,038.98. The Dow is up just 15.19 points or 0.1 percent at 32,732.79 after rising nearly 200 points in early trading.

The early strength on Wall Street came as concerns about turmoil in the banking sector continued to ease after sparking substantial volatility on Wall Street in recent weeks.

A lack of major negative developments regarding the banking industry in recent days led to confidence the situation has stabilized.

Buying interest has waned since then, however, as traders look ahead to tomorrow's report on personal income and spending.

The report includes a reading on inflation said to be preferred by the Federal Reserve and could have an impact on the outlook for interest rates.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group's FedWatch Tool currently indicates a 48.9 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 51.1 percent chance of a 25 basis point increase.

On the economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended March 25th.

The report said initial jobless claims rose to 198,000, an increase of 7,000 from the previous week's unrevised level of 191,000. Economists had expected jobless claims to inch up to 196,000.

A separate report released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.6 percent in the fourth quarter compared to the previously reported 2.7 percent jump. Economists had expected the pace of growth to be unrevised.

The Commerce Department said the slower than previously estimated growth reflected downward revisions to exports and consumer spending.

Sector News

Despite the pullback by the broader markets, airline stocks continue to see substantial strength on the day, with the NYSE Arca Airline Index soaring by 2.3 percent.

Considerable strength also remains visible among semiconductor stocks, as reflected by the 1.4 percent gain being posted by the Philadelphia Semiconductor Index. Earlier in the session, the index reached its best closing level almost a year.

Tobacco, steel and gold stocks also continue to see notable strength, while banking stocks have shown a significant pullback over the course of the session.

After an initial move to the upside, the KBW Bank Index has turned lower on the day and is currently down by 1.4 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, although Japan's Nikkei 225 Index bucked the uptrend and fell by 0.4 percent. China's Shanghai Composite Index climbed by 0.7 percent, while South Korea's Kospi rose by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index surged by 1.3 percent, the French CAC 40 Index jumped by 1.1 percent and the U.K.'s FTSE 100 Index advanced by 0.7 percent.

In the bond market, treasuries have moved modestly higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is 1.3 basis points at 3.553 percent.