Dow Seeing Further Upside But Nasdaq Pulling Back Sharply

After ending the previous session modestly higher, the major U.S. stock indexes have moved in starkly opposite directions during trading on Thursday.

While the Dow has once again risen to its best intraday level in over a year, the tech-heavy Nasdaq has pulled back sharply.

Currently, the major averages continue to turn in a mixed performance. The Dow is up 270.04 points or 0.8 percent at 35,331.25, but the S&P 500 is down 12.95 points or 0.3 percent at 4,552.77 and the Nasdaq is down 176.32 points or 1.2 percent at 14,181.70.

The sharp pullback by the Nasdaq comes amid a negative reaction to earnings news from companies like Netflix (NFLX) and Tesla (TSLA).

Shares of Netflix have plummeted by 8.4 percent after the streaming giant reported better than expected second quarter earnings but weaker than expected revenues.

Electric car maker Tesla has also plunged by 6.9 percent after reporting second quarter earnings and revenues that exceeded analyst estimates but a notable decrease in operating margins.

On the other hand, the narrower Dow is benefiting from a spike by shares of Johnson & Johnson (JNJ), with the healthcare giant surging by 5.8 percent.

The jump by J&J comes after the company reported better than expected second quarter earnings and raised its full-year guidance.

Dow component IBM Corp. (IBM) has also shot up by 2.7 percent after the tech giant reported second quarter earnings that beat expectations.

Traders are also reacting to a Labor Department report showing first-time claims for U.S. unemployment benefits unexpectedly dipped in the week ended July 15th.

The report said initial jobless claims slipped to 228,000, a decrease of 9,000 from the previous week’s unrevised level of 237,000. Economists had expected jobless claims to inch up to 242,000.

Sector News

Housing stocks are seeing substantial weakness on the day, dragging the Philadelphia Housing Sector Index down by 2.6 percent. The index pulled back sharply after reaching a record intraday high in early trading.

The sell-off by housing stocks comes following the release of a report from the National Association of Realtors showing existing home sales fell by more than expected in the month of June.

Significant weakness is also visible among semiconductor stocks, as reflected by the 2.4 percent slump by the Philadelphia Semiconductor Index.

Shares of Taiwan Semiconductor (TSM) have plunged by 4.5 percent after the chipmaker reported a steep drop in second quarter profits.

Gold, computer hardware and software stocks are also seeing considerable weakness, while pharmaceutical and healthcare stocks have rallied following J&J’s upbeat results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.2 percent, while China’s Shanghai Composite Index slumped by 0.9 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index has climbed by 0.7 percent, the French CAC 40 Index is up by 0.6 percent and the German DAX Index is up by 0.4 percent.

In the bond market, treasuries have shown a significant pullback following recent strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.2 basis points at 3.844 percent.

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