News Column

Stocks Seeing Modest Weakness In Mid-Day Trading - US Commentary

June 19, 2014

WASHINGTON (Alliance News) - After initially showing a lack of direction, stocks have moved modestly lower over the course of the trading day on Thursday. The modest weakness on Wall Street comes on the heels of four consecutive sessions of gains.

The major averages have moved roughly sideways in recent trading, stuck below the unchanged line. The Dow is down 28.13 points or 0.2% at 16,878.49, the Nasdaq is down 10.57 points or 0.2% at 4,352.27 and the S&P 500 is down 1.40 points or 0.1% at 1,955.58.

Profit taking is partly contributing to pullback by stocks, with some traders cashing in on the upward move seen over the past sessions.

The S&P 500 is pulling back off the record closing high set on Wednesday, while the Nasdaq is giving back ground after reaching its best closing level since 2000.

Meanwhile, traders seem to have shrugged off a batch of largely upbeat US economic data, including a report from the Philadelphia Federal Reserve showing an unexpected acceleration in the pace of growth in regional manufacturing activity.

The Philly Fed said its diffusion index of current general activity climbed to 17.8 in June from 15.4 in May, with a positive reading indicating growth in regional manufacturing activity.

The increase came as a surprise to economists, who had expected the Philly Fed Index to drop to a reading of 14.0.

A separate report from the Labor Department showed a modest pullback in initial jobless claims in the week ended June 14th.

The report said initial jobless claims dipped to 312,000, a decrease of 6,000 from the previous week's revised level of 318,000. Economists had expected jobless claims to drop to 313,000.

The Conference Board also released a report showing that its index of leading economic indicators rose for the fourth straight month in May.

Among individual stocks, shares of Pier 1 Imports (PIR) have come under pressure after the retailer reported weaker than expected first quarter earnings and provided disappointing guidance.

Drug store giant Rite Aid (RAD) has also come under pressure after reporting first quarter earnings that fell sharply year-over-year due to higher drug costs and reimbursement rate reductions.

On the other hand, shares of BlackBerry (BBRY) have moved sharply higher on the day after the smartphone maker reported a narrower than expected first quarter loss.

Sector News

Brokerage stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.2%. The index is giving back ground after ending the previous session at its best closing level in over two months.

Stifel Financial (SF), Interactive Brokers (IBKR) and LPL Financial (LPLA) are turning in some of the brokerage sector's worst performances.

Considerable weakness has also emerged among networking stocks, as reflected by the 1.1% loss being posted by the NYSE Arca Networking Index. Juniper Networks (JNPR) is leading the sector lower after being downgraded by Mizuho to Neutral from Buy.

Electronic storage, biotechnology, and internet stocks are also seeing some weakness in mid-day trading, while gold stocks have moved sharply higher on the day amid a jump by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region once again turned in a mixed performance on Thursday. Japan'sNikkei 225 Index surged up by 1.6%, while China's Shanghai Composite Index tumbled by 1.6%.

Meanwhile, the major European markets all moved higher on the day. While the UK'sFTSE 100 Index rose by 0.4%, the French CAC 40 Index and the German DAX Index both advanced by 0.7%.

In the bond market, treasuries have pulled back of their best levels but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 2.595%.

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Source: Alliance News

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