Stocks Close Roughly Flat Following Recent Strength - U.S. Commentary

(RTTNews) - After trending higher over the past several sessions, stocks turned in a relatively lackluster performance during trading on Thursday. Despite the lack of direction, the Dow managed to inch up to another new record closing high.

The major averages eventually ended the day on opposite sides of the unchanged line. While the Dow crept up 7.91 points or less than a tenth of a percent to 20,619.77, the Nasdaq edged down 4.54 points or 0.1 percent to 5,814.90 and the S&P 500 dipped 2.03 points or 0.1 percent to 2,347.22.

The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following the recent run to record highs.

While some traders may look to cash in on the recent gains, others may be reluctant to sell and miss out on any further upside.

Traders were also digesting another batch of U.S. economic data, including a report from the Labor Department showing a modest increase in initial jobless claims in the week ended February 11th.

The report said initial jobless claims edged up to 239,000, an increase of 5,000 from the previous week's unrevised level of 234,000. Economists had expected jobless claims to climb to 245,000.

A separate report from the Commerce Department showed a pullback in housing starts in January, although the report also showed a jump in building permits.

The Commerce Department said housing starts fell by 2.6 percent to an annual rate of 1.246 million in January after jumping by 11.3 percent to a revised 1.279 million in December.

Meanwhile, building permits, an indicator of future housing demand, jumped by 4.6 percent to a rate of 1.285 million in January after rising by 1.3 percent to a revised 1.228 million in December.

The Philadelphia Federal Reserve also released a report showing a substantial acceleration in the pace of growth in regional activity in February.

The Philly Fed said its index for current manufacturing activity in the region soared to 43.3 in February from 23.6 in January, with a positive reading indicating growth.

With the sharp increase during the month, the Philly Fed Index skyrocketed to its highest level since January of 1984.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing the lackluster close by the broader markets.

Oil service stocks saw considerable weakness, however, with the Philadelphia Oil Service Index slumping by 1.9 percent. The weakness in the sector came despite a modest increase by the price of crude oil.

Significant weakness was also visible among natural gas stocks, which moved lower along with the price of natural gas. With natural gas for March delivery sliding $0.071 to $2.854 per million BTUs, the NYSE Arca Natural Gas Index fell by 1.8 percent.

On the other hand, gold stocks moved sharply higher on the day, driving the NYSE Arca Gold Bugs Index up by 2.1 percent. The strength in the sector came as gold for April delivery climbed $8.50 to $1,241.60 an ounce.

Other Markets

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

Meanwhile, the major European markets gave back some ground following recent strength. While the French CAC 40 Index fell by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index both dipped by 0.3 percent.

In the bond market, treasuries moved back to the upside after trending lower in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.2 basis points to 2.450 percent.

Looking Ahead

Following the slew of U.S. economic data released over the past two days, the schedule of releases for Friday is relatively quiet.

The Conference Board is due to release its report on leading economic indicators in January, with the leading economic index expected to rise by 0.4 percent.

On the earnings front, Campbell Soup (CPB), Deere (DE), and J.M. Smucker (SJM) are among the companies due to report their quarterly results before the start of trading on Friday.