Stocks Seeing Modest Strength After Initial Upward Move - U.S. Commentary

(RTTNews) - After moving higher at the start of trading, stocks have given back some ground over the course of early trading on Thursday. The major averages have pulled back off their highs for the young session but are clinging to modest gains.

Currently, the major averages are hovering just above the unchanged line. The Dow is up 15.05 points or 0.1 percent at 17,981.12, the Nasdaq is up 6.78 points or 0.1 percent at 5,192.20 and the S&P 500 is up 3.20 points or 0.2 percent at 2,111.78.

The initial strength on Wall Street partly reflected 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.

Buying interest waned not long after the open, however, as Greece continues to struggle to reach an agreement for additional aid from its international creditors.

European financial ministers are holding another meeting today in an attempt to hammer out a deal that would allow Greece 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.

Most of the major sectors are subsequently showing only modest moves, although health care stocks are seeing some strength after a Supreme Court ruling upholding the Obamacare subsidies.

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.

The major European markets have also moved lower on the day. While the U.K.'s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index and the German DAX Index are down by 0.4 percent and 0.3 percent, respectively.

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 3.1 basis points at 2.402 percent.