U.S. Stocks Turning In Lackluster Performance As Early Buying Interest Fades

Stocks showed a strong move to the upside at the start of trading on Thursday but have subsequently settled into the lackluster trend seen over the past few sessions. The major averages have pulled back well off their highs are once again lingering near the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 7.39 points or 0.1 percent at 14,043.64, the Dow is up 25.09 points or 0.1 percent at 33,845.47 and the S&P 500 is up 10.39 points or 0.3 percent at 4.193.57.

The Nasdaq and the S&P 500 initially rose to new record intraday highs in reaction to upbeat earnings news from tech giants like Apple (AAPL) and Facebook (FB).

Shares of Apple jumped as much as 2.6 percent to reach a nearly three-month intraday high but have pulled back near the unchanged line since then.

The initial advance by Apple came after the tech giant reported fiscal second quarter earnings that far exceeded analyst estimates and increased its stock buyback and dividend.

Social media giant Facebook has also pulled back off its best levels but is holding on to a strong gain after reporting much better than expected first quarter earnings.

Shares of Qualcomm (QCOM) have also moved notably higher after the chipmaker reported better than expected fiscal second quarter results and provided upbeat guidance.

While most major companies have reported better than expected results this earnings season, the upbeat results have not translated into broad based buying interest.

Trades may be reluctant to continue buying stocks amid concerns about valuations and whether the results are strong enough to support even further upside.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits dropped to a new pandemic-era low in the week ended April 24th.

The report said initial jobless claims dipped to 553,000, a decrease of 13,000 from the previous week’s revised level of 566,000.

Economists had expected jobless claims to inch up to 549,000 from the 547,000 originally reported for the previous week.

Jobless claims fell for the third straight week, once again sliding to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Meanwhile, preliminary data released by the Commerce Department showed an acceleration in the pace of U.S. economic growth in the first three months of 2021.

The report said real gross domestic product surged up by 6.4 percent in the first quarter after jumping by 4.3 percent in the fourth quarter of 2020. Economists had expected GDP to increase by 6.5 percent.

Sector News

While most of the major sectors are showing only modest moves, gold stocks have moved sharply lower on the day. Reflecting the weakness in the sector, the NYSE Arca Gold Bugs Index has plunged by 3 percent.

The sell-off by gold stocks comes amid a decrease by the price of the precious metal, with gold for June delivery falling $7.50 to $1,766.40 an ounce.

Significant weakness is also visible among software stocks, as reflected by the 1.8 percent drop by the Dow Jones U.S. Software Index. The index continues to give back ground after reaching a record closing high on Monday.

On the other hand, banking stocks continue to turn in a strong performance in mid-day trading, driving the KBW Bank Index up by 1.3 percent to a record intraday high.

Housing stocks also continue to see considerable strength on the day, resulting in a 1.3 percent advance by the Philadelphia Housing Sector Index.

The strength among housing stocks comes after a report from the National Association of Realtors showed a rebound in pending home sales in the month of March.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index rose by 0.5 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets moved to the downside over the course of the session. While the German DAX Index slumped by 0.9 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.’s FTSE 100 Index closed just below the unchanged line.

In the bond market, treasuries have climbed off their worst levels but remain in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 1.659 percent.

Business News