Stocks Continue To Experience Choppy Trading - U.S. Commentary

(RTTNews) - Stocks continue to turn in a relatively lackluster performance in mid-day trading on Thursday after showing a lack of direction earlier in the day. The major averages remain close to the unchanged line, holding on to the strong gains posted in the two previous sessions.

Currently, the major averages are posting modest gains. The Dow is up 30.92 points or 0.2 percent at 17,939.20, the Nasdaq is up 5.83 points or 0.1 percent at 4,953.25, and the S&P 500 is up 2.45 points or 0.1 percent at 2,084.87.

The choppy trading on Wall Street comes as traders are expressing some uncertainty about the near-term outlook for the markets following recent gains.

The rally seen on Wednesday lifted the Dow to its best closing level in five months, while the S&P 500 reached a four-month high and the Nasdaq reached a three-month high.

Traders are also digesting the latest batch of U.S. economic data, including a Labor Department report showing tame consumer price inflation.

The Labor Department said its consumer price index inched up by 0.1 percent in March after dipping by 0.2 percent in February, while economists had expected the index to rise by 0.2 percent.

Excluding food and energy prices, core consumer prices also edged up by 0.1 percent in March compared to economist estimates for a 0.2 percent increase.

On an annual basis, the pace of consumer price growth slowed to 0.9 percent in March from 1.0 in February, and the pace of core price growth slowed to 2.2 percent from 2.3 percent.

The tame inflation data has added to recent speculation that the Federal Reserve will not raise interest rates at its next meeting later this month.

A separate report from the Labor Department showed an unexpected drop in initial jobless claims in the week ended April 9th.

In earnings news, financial giants Bank of America (BAC) and Wells Fargo (WFC) released their first quarter results this morning.

Both Bank of America and Wells Fargo reported first quarter earnings that fell year-over-year but came in above analyst estimates.

Delta Air Lines (DAL) also released its first quarter results, reporting better than expected earnings but on revenues that missed expectations.

Sector News

Despite the lack of direction being shown by the broader markets, substantial weakness has emerged among gold stocks. The NYSE Arca Gold Bugs Index has tumbled by 4.5 percent, pulling back further off the one-year closing high set on Tuesday.

The weakness among gold stocks comes amid a notable decrease by the price of the precious metal, with gold for June delivery sliding $19.90 to $1,228.40 an ounce.

Considerable weakness also remains visible among computer hardware stocks, as reflected by the 3.6 percent drop by the NYSE Arca Computer Hardware Index.

Seagate Technology (STX) is posting a steep loss, with the disk drive maker tumbling by 18.9 percent after warning of weaker than expected third quarter results.

On the other hand, banking stocks have shown a strong move to the upside on the day, driving the Dow Jones Banks Index up by 1.7 percent. The index has risen to a three-month intraday high.

Bank of America (BAC) has helped to lead the banking sector higher as traders react to company's first quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 3.2 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index closed just above the unchanged line, the French CAC 40 Index and the German DAX Index climbed by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries have pulled back more firmly into negative territory as the day has progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 1.797 percent.