Stocks Move Modestly Higher On Mixed Batch Of Data - U.S. Commentary

(RTTNews) - Stocks have moved modestly higher in early trading on Thursday, extending the strong upward move seen in the previous session. The major averages have all moved to the upside, although buying interest has remained somewhat subdued.

Recently, the major averages have moved roughly sideways, holding on to slim gains. The Dow is up 15.60 points or 0.1 percent at 16,548.66, the Nasdaq is up 14.09 point or 0.3 percent at 4,145.62 and the S&P 500 is up 3.79 points or 0.2 percent at 1,891.82.

The modest strength that has emerged on Wall Street in early trading partly reflects a positive reaction to a mixed batch of economic.

While upbeat reports on Chinese manufacturing activity and U.S. existing home sales have generated some positive sentiment, a separate report showing a bigger than expected rebound in U.S. jobless claims has helped to limit the upside.

The preliminary results of a manufacturing survey by Markit and HSBC showed that Chinese manufacturing activity continued to contract in May, albeit at a notably slower rate.

The headline manufacturing purchasing managers' index rose 1.6 points to 49.7 in May, reaching a five-month. Economists had expected a smaller improvement to 48.3.

Additionally, the National Association of Realtors released a report showing that U.S. existing home sales rose for the first time this year in April.

NAR said existing home sales rose 1.3 percent to a seasonally adjusted annual rate of 4.65 million in April from 4.59 million in March.

On the other hand, the Labor Department released a report showing that jobless claims jumped to 326,000 in the week ended May 17th from the previous week's revised level of 298,000. Economists had been expecting jobless claims to climb to 310,000.

While the number for the previous week was upwardly revised from 297,000, it still represents the lowest number of claims in seven years.

Biotechnology stocks are seeing significant strength in early trading, with the NYSE Arca Biotechnology Index up by 1.4 percent. Vertex (VRTX) and Nektar Therapeutics (NKTR) are posting notable gains.

Early strength is also visible among housing stocks, which have reacted positively to the existing home sales data. Reflecting the strength in the sector, the Philadelphia Housing Sector Index has advanced by 1.1 percent.

Brokerage, electronic storage, and steel stocks have also moved to the upside, while tobacco stocks are giving back some ground after rallying into the close of the previous session.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

The major European markets are seeing more modest strength on the day. While the German DAX Index has edged up by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.1 percent.

In the bond market, treasuries have moved modestly lower, extending the downward move seen on Wednesday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 2.548 percent.