Stocks Continue To See Modest Strength In Mid-Day Trading - U.S. Commentary

(RTTNews) - Stocks are seeing modest strength in mid-day trading on Thursday, partly offsetting the sharp pullback seen in the previous session. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

Currently, the major averages are holding on to slim gains. The Dow is up 29.93 points or 0.2 percent at 17,996.00, the Nasdaq is up 12.14 points or 0.2 percent at 5,134.55 and the S&P 500 is up 4.66 points or 0.2 percent at 2,113.24.

The modest strength on Wall Street partly reflects a positive reaction to a report from the Commerce Department showing a bigger than expected increase in personal spending in May.

The report said personal spending jumped by 0.9 percent in May, reflecting the biggest increase in nearly six years. Spending had been expected to increase by 0.7 percent.

The increase in spending came amid continued growth in personal income, which rose by 0.5 percent for the second straight month. Economists had expected income to rise by 0.4 percent.

"We are finally seeing signs of consumers beginning to spend the gasoline savings they have been sitting on since the start of this year," said Paul Ashworth, Chief U.S. Economist at Capital Economics. "Moreover, spending is also being driven by a rapidly improving labor market."

A separate report from the Labor Department showed a modest increase in initial jobless claims in the week ended June 20th, although claims still came in below economist estimates.

Traders seem somewhat reluctant to pick up stocks, however, as Greece continues to struggle to reach an agreement for additional aid from its international creditors.

The latest reports indicate that a Eurogroup meeting in Brussels to discuss proposals for Greece has ended, with European finance ministers set to hold their next session on Saturday.

Greece and its creditors are attempting to hammer out a deal that would allow the debt-laden country to avoid a default at the end of the month.

However, analysts note that time is running short, as a deal would need to be approved by the Greek and German parliaments.

Sector News

Despite the modest strength being shown by the broader markets, most of the major sectors are showing only small moves on the day.

Health care stocks are seeing some strength, however, with traders reacting positively to news the Supreme Court has upheld the Obamacare subsidies.

The ruling allows the government to continue providing lower-income Americans with subsidies to purchase insurance through either the federal or state exchanges.

Meanwhile, oil service stocks have shown a notable move to the downside on the day, dragging the Philadelphia Oil Service Index down by 1 percent.

The weakness among oil service stocks comes as the price of crude oil for August delivery is falling $0.36 to $59.91 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index dropped by 0.5 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

Meanwhile, the major European markets ended the day mixed. While the German DAX Index closed just above the unchanged line, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent.

In the bond market, treasuries have moved to the downside on the heels of the upbeat spending data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.3 basis points at 2.414 percent.