Stocks Regain Ground But Remain Mostly Negative - U.S. Commentary

(RTTNews) - Stocks remain mostly negative in mid-day trading on Thursday after turning lower earlier in the session. Selling pressure has waned as the day has progressed, however, allowing the major averages to climb off their worst levels of the day.

Currently, the major averages are posting modest losses. The Dow is down 22.45 points or 0.1 percent at 17,845.13, the Nasdaq is down 19.42 points or 0.4 percent at 5,123.06 and the S&P 500 is down 2.99 points or 0.1 percent at 2,099.32.

The modest weakness that remains visible on Wall Street partly reflects concerns about the outlook for interest rates following Federal Reserve Chair Janet Yellen's comments on Wednesday.

In testimony before the House Financial Services Committee, Yellen said a December interest rate hike would be a "live possibility" if the incoming economic data supports such a move.

As a result, traders are likely to keep a particularly close eye on the Labor Department's monthly jobs report due to be released tomorrow morning.

Economists expect the report to show an increase of about 190,000 jobs in October following the addition of 142,000 jobs in September. The unemployment rate is expected to dip to 5.0 percent from 5.1 percent.

Before the start of today's trading, the Labor Department released a report showing that initial jobless claims rose more than expected in the week ended October 31st.

The report said initial jobless claims climbed to 276,000, an increase of 16,000 from the previous week's unrevised level of 260,000. Economists had expected jobless claims to inch up to 262,000.

Meanwhile, a separate report from the Labor Department showed an unexpected increase in labor productivity in the third quarter.

The Labor Department said productivity climbed 1.6 percent in third quarter following an upwardly revised 3.5 percent jump in the second quarter. Productivity had been expected to edge down by 0.2 percent.

The report also said unit labor costs rose by 1.4 percent in the third quarter after tumbling by 1.8 percent in the second quarter. Economists had expected costs to surge up by 2.3 percent.

Sector News

Telecom stocks continue to see substantial weakness in mid-day trading, resulting in a 7.2 percent drop by the NYSE Arca Telecom Index. With the steep loss, the index has fallen to its lowest intraday level in a month.

Qualcomm (QCOM) has helped to lead the telecom sector lower, with the mobile chipmaker plunging 13.6 percent after providing disappointing first quarter guidance.

Considerable weakness also remains visible among gold stocks, as reflected by the 4.2 percent loss being posted by the NYSE Arca Gold Bugs Index. Royal Gold (RGLD) is posting a steep loss after reporting weaker than expected first quarter results.

Steel, semiconductor, biotech, and oil service stocks also continue to see notable weakness, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index advanced by 1 percent, while Australia's All Ordinaries Index dropped by 0.9 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index fell by 0.8 percent, the German DAX Index and the French CAC 40 Index rose by 0.4 percent and 0.6 percent, respectively.

In the bond market, treasuries have moved modestly lower, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 2.249 percent.