Major Averages Turn Mixed After Seeing Initial Weakness
After coming under pressure early in the session, stocks have once again shown a notable recovery over the course of the trading day on Thursday. The major averages have climbed well off their worst levels, with the Nasdaq and the S&P 500 peeking above the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Dow is down 51.75 points or 0.2 percent at 29,499.67, the Nasdaq is up 7.05 points or 0.1 percent at 9,733.01 and the S&P 500 is up 1.19 points or less than a tenth of a percent at 3,380.64.
Profit taking contributed to initial weakness on Wall Street, as some traders looked to cash in on recent gains amid news of a jump in new coronavirus cases.
Officials revealed an additional 242 deaths from the coronavirus in the Chinese province of Hubei as well as 14,840 new confirmed cases.
While the jump in confirmed cases was partly due to the adoption of new methodology for counting infections, the spike has still led to renewed fears about the outbreak.
However, traders have recently been able to shrug off concerns about the coronavirus amid optimism that the outbreak will eventually be contained.
The early weakness on Wall Street was subsequently seen another buying opportunity for some traders even as a number of companies continue to warn about the impact of the outbreak.
On the U.S. economic front, the Labor Department released a report showing a modest increase in consumer prices in the month of January.
The Labor Department said its consumer price index inched up by 0.1 percent in January after rising by 0.2 percent in December. Economists had expected prices to increase by 0.2 percent.
Core consumer prices, which exclude food and energy prices, rose by 0.2 percent in January after ticking up by 0.1 percent in the previous month. The increase in core prices matched economist estimates.
A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits inched up by less than expected in the week ended February 8th.
The report said initial jobless claims crept up to 205,000, an increase of 2,000 from the previous week’s revised level of 203,000.
Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week.
Despite the recovery by the broader markets, substantial weakness remains visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index slumping by 2.3 percent.
NetApp (NTAP) has led the sector lower after the data storage company reported fiscal third quarter results that missed analyst estimates and announced the retirement of its CFO.
Oil service, telecom and pharmaceutical stocks are also seeing some weakness, although selling pressure has waned considerably from earlier in the day.
On the other hand, gold stocks have shown a notable move to the upside, driving the NYSE Arca Gold Bugs Index up by 1.4 percent.
The strength among gold stocks comes amid an increase by the price of the precious metal, with gold for April delivery climbing $7.60 to $1,579.20 an ounce.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index slid by 0.7 percent.
The major European markets also ended the day lower but well off their worst levels. While the U.K.’s FTSE 100 Index slumped by 1.1 percent, the French CAC 40 Index dipped by 0.2 percent and the German DAX Index closed just below the unchanged line.
In the bond market, treasuries have pulled back off their highs of the session but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 1.619 percent.
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