U.S. Stocks Give Back Ground After Initial Move To The Upside

Stocks moved modestly higher early in the trading day on Thursday but have given back ground over the course of the session. The major averages have pulled back well off their highs of the session, with the Dow showing a notable decline.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 41.82 points or 0.3 percent at 16,843.37, the S&P 500 is down 7.30 points or 0.1 percent at 5,299.71 and the Dow is down 299.07 points or 0.8 percent at 39.371.97.

The early strength on Wall Street came as tech stocks rallied following upbeat quarterly results from Nvidia (NVDA), with the Nasdaq and S&P 500 reaching new record highs.

Despite the subsequent pullback by the broader markets, shares of Nvidia (NVDA) are soaring by 9.6 after the AI darling reported better than expected fiscal first quarter results and provided upbeat guidance.

Nvidia also announced a ten-for-one stock split of its common stock and increased its quarterly cash dividend by 150 percent to $0.10 per share.

Buying interest waned shortly after the start of trading, as concerns about the outlook for interest rates continue to hang over the broader markets following yesterday’s slightly hawkish Fed minutes.

With the minutes signaling rates are likely to remain higher for longer than previously expected, the chances rates will be lower by September have fallen to 57.3 percent, according to CME Group’s FedWatch Tool.

Potentially adding to the rate concerns, the Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 18th.

The Labor Department said initial jobless claims slid to 215,000, a decrease of 8,000 from the previous week’s revised level of 223,000.

Economists had expected jobless claims to edge down to 220,000 from the 222,000 originally reported for the previous week.

Meanwhile, a steep drop by shares of Intel (INTC) is weighing on the Dow, with the semiconductor giant tumbling by 3.1 percent amid concerns about competition from Nvidia.

Sector News

Networking stocks have moved sharply lower over the course of the session, dragging the NYSE Arca Networking Index down by 2.5 percent.

An extended pullback by the price of gold is also weighing on gold stocks, as reflected by the 1.9 percent slump by the NYSE Arca Gold Bugs Index.

Airline stocks have also shown a significant move to the downside, with the NYSE Arca Airline Index falling by 1.7 percent to its lowest intraday level in over a month.

Biotechnology, utilities and commercial real estate stocks are also seeing notable weakness, while some strength remains visible among computer hardware stocks.

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 jumped by 1.3 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.

Meanwhile, the major European markets have given back ground after seeing strength earlier in the day. While the French CAC 40 Index remains just above the unchanged line, the German DAX Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

In the bond market, treasuries have come under pressure, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.1 basis points at 4.485 percent.