Stocks Turning In Lackluster Performance On Mixed Catalysts - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks have shown a lack of direction over the course of the trading day on Thursday. The major averages have recently been bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains. The Dow is up 2.84 points or less than a tenth of a percent at 15,947.30, the Nasdaq is up 20.45 points 0.5 percent at 4,488.62 and the S&P 500 is up 3.36 points or 0.2 percent at 1,886.31.

The choppy trading on Wall Street comes as traders digest a batch of mixed catalysts, including an increase by the price of crude oil, the latest earnings news, and some disappointing U.S. economic data.

A sharp increase by the price of crude oil contributed to the initial buying interest, with crude for March delivery nearly reaching $35 a barrel.

The jump by the price of crude oil came amid Russian Energy Minister Alexander Novak's claims that Saudi Arabia proposed cutting oil production by up to 5 percent.

Crude for March delivery has pulled back well off its best levels since then but currently remains up $0.98 at $33.28 a barrel.

In earnings news, shares of Facebook (FB) have moved sharply higher on the day after the social media giant reported fourth quarter results that exceeded analyst estimates.

Online payment service provider PayPal (PYPL) is also seeing notable strength after reporting better than expected fourth quarter results and announcing a $2 billion stock buyback.

Meanwhile, shares of eBay (EBAY) have come under pressure after the e-commerce company reported fourth quarter results that matched estimates but provided disappointing guidance.

On the economic front, the Commerce Department released a report before the start of trading showing a much steeper than expected drop in durable goods orders in December.

The Commerce Department said durable goods orders plunged by 5.1 percent in December after falling by a revised 0.5 percent in November. Economists had expected orders to dip by just 0.6 percent.

Excluding a 12.4 percent decrease in orders for transportation equipment, durable goods orders still tumbled by 1.2 percent in December compared to a 0.5 percent drop in November.

A separate report from the National Association of Realtors also showed a much smaller than expected increase in pending home sales in the month of December.

On the other hand, the Labor Department released a report showing that initial jobless claims pulled back by more than expected in the week ended January 23rd.

The report said initial jobless claims fell to 278,000, a decrease of 16,000 from the previous week's revised level of 294,000. Economists had expected jobless claims to pull back to 285,000.

Sector News

Despite the lackluster performance being turned in the broader markets, substantial weakness is visible among telecom stocks. Reflecting the weakness in the sector, the NYSE Arca Telecom Index has tumbled by 3.8 percent.

Qualcomm (QCOM) has helped to lead the telecom sector lower after the chipmaker reported first quarter results that beat estimates but provided disappointing guidance.

Biotechnology stocks have also shown a substantial move to the downside, dragging the NYSE Arca Biotechnology Index down by 3.8 percent. Earlier in the session, the index hit its lowest intraday level in well over a year.

Airline, networking, and healthcare stocks are also seeing considerable weakness, while energy, internet, and utilities stocks are turning in strong performances on the day.

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 dropped by 0.7 percent, while Hong Kong's Hang Seng Index climbed by 0.8 percent.

Meanwhile, the major European markets all showed notable moves to the downside on the day. While the German DAX Index plunged by 2.4 percent, the French CAC 40 Index tumbled by 1.3 percent and the U.K.'s FTSE 100 Index slumped by 1 percent.

In the bond market, treasuries are showing a lack of direction amid the choppy trading on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.998 percent.