News Column

Stocks Move Modestly Lower On Disappointing Sales Data - US Commentary

June 12, 2014

WASHINGTON (Alliance News) - With traders reacting negatively to a slew of US economic data, stocks are seeing modest weakness in early trading on Thursday. The major averages have all moved to the downside, adding to the losses posted in the previous session.

Currently, the major averages are posting slim losses on the day. The Dow is down 31.08 points or 0.2% at 16,812.80, the Nasdaq is down 9.81 points or 0.2% at 4,322.12 and the S&P 500 is down 4.47 points or 0.2% at 1,939.42.

The early weakness on Wall Street is partly due to the release of a report from the Commerce Department showing that retail sales rose by less than expected in the month of May.

The Commerce Department said retail sales rose by 0.3% in May, while economists had been expecting sales to climb by about 0.6%.

Traders seem to have shrugged off a notable upward revision to April sales, which rose by 0.5% compared to the 0.1% uptick originally reported for the month.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the May miss relative to expectations was offset by the revision higher in April, thus leaving Q2 GDP estimates the same."

A report from the Labor Department showing an unexpected increase in weekly jobless claims may also be weighing on the markets.

The report said initial jobless claims edged up to 317,000 in the week ended June 7th from the previous week's revised level of 313,000. Economists had expected jobless claims to dip to 310,000.

After helping to lead the way lower on Wednesday, airline stocks are once again seeing substantial weakness on the day. The NYSE Arca Airline Index has tumbled by 2.8%, pulling back further off last Friday's twelve-year closing high

Steel, utilities, and railroad stocks are also seeing early weakness, while strength among gold and oil stocks is helping to limit the downside for the markets.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan'sNikkei 225 Index fell by 0.6%, while Hong Kong'sHang Seng Index ended the day down by 0.4%.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index is just below the unchanged line, the UK'sFTSE 100 Index and the French CAC 40 Index are both up by 0.1%.

In the bond market, treasuries have shown a lack of direction and are currently nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.637%.

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Source: Alliance News

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