Market Commentary and Intraday News

Stocks Stage Recovery Attempt After Seeing Early Weakness - U.S. Commentary

243 days ago

(RTTNews) - Stocks have shown a notable recovery attempt over the course of the trading day on Thursday after coming under pressure early in the session. The rebound was partly due to the release of relatively upbeat manufacturing data.

The major averages have climbed well off their worst levels of the day but currently remain stuck in the red. The Dow is down 8.09 points or 0.1 percent at 13,569.87, the Nasdaq is down 10.18 points or 0.3 percent at 3,172.44 and the S&P 500 is down 3.22 points or 0.2 percent at 1,457.83.

The early weakness on Wall Street came on the heels of the release of a Labor Department report showing that jobless claims came in above estimates in the week ended September 15th.

While jobless claims edged down to 382,000 from the previous week's revised figure of 385,000, economists had expected jobless claims to drop to 373,000 from the 382,000 originally reported for the previous week.

Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, the labor market still can't gain any lasting traction in light of the obvious economic challenges."

Selling pressure was relatively subdued, however, as traders remained reluctant to make any significant moves amid uncertainty about the near-term outlook for the markets.

The subsequent recovery attempt was partly due to the release of a report from the Philadelphia Federal Reserve showing that its index of regional manufacturing activity rose by much more than expected.

The Philly Fed said its diffusion index of current activity rose to a negative 1.9 in September from a negative 7.1 in August, although a negative reading still indicates a contraction in regional manufacturing activity.

Among individual stocks, shares of Adobe Systems (ADBE) have moved higher even though the publishing and design software developer reported weaker than expected third quarter revenues and forecast fourth quarter results below analyst estimates.

Denbury Resources (DNR) is also posting a notable gain after announcing an agreement to sell its Bakken assets in North Dakota and Montana to Exxon Mobil (XOM) for $1.6 billion in cash

Meanwhile, Bed Bath & Beyond (BBBY) has come under pressure after the home furnishings retailer reported second quarter earnings that rose year-over-year but still came in weaker than expected.

Sector News

While many of the major sectors have recovered from their early lows, substantial weakness remains visible among railroad stocks. Reflecting the continued weakness in the railroad sector, the Dow Jones Railroads Index is down by 5 percent.

Norfolk Southern (NSC) has helped to lead the railroad sector lower, with the railroad company down by 9 percent after warning of weaker than expected third quarter earnings.

Brokerage stocks also continue to see considerable weakness on the day, resulting in a 1.8 percent loss by the NYSE Arca Broker/Dealer Index. Jefferies (JEF) continues to turn in one of the sector's worst performances despite reporting better than expected third quarter results.

Steel, commercial real estate and gold stocks also continue to post notable losses, with gold stocks moving lower along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness during trading on Thursday. Japan's Nikkei 225 Index dropped by 1.6 percent, while Hong Kong's Hang Seng Index fell by 1.2 percent.

The major European markets also moved to the downside on the day. While the German DAX Index closed just below the unchanged line, the U.K.'s FTSE 100 Index and the French CAC 40 Index both ended the day down by 0.6 percent.

In the bond market, treasuries are seeing continued strength but have pulled back off their best levels of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.8 basis points at 1.754 percent after hitting a low of 1.723 percent.

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