07.05.2014 18:09:24
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Stocks Turning In Mixed Performance Amid Volatile Session - U.S. Commentary
(RTTNews) - After ending the previous session sharply lower, stocks have seen considerable volatility over the course of the trading day on Wednesday. The major averages have shown big swings back and forth and are currently turning in a mixed performance.
While the Dow and the S&P 500 have bounced back into positive territory, the Nasdaq remains down 24.48 points or 0.6 percent at 4,056.28. The Dow is up 108.46 points or 0.7 percent at 16,509.48, and the S&P 500 is up 7.64 points or 0.4 percent at 1,875.36.
Substantial weakness among electronic storage stocks is weighing on the tech-heavy Nasdaq, with the NYSE Arca Disk Drive Index plummeting by 4.4 percent. With the steep drop, the index has fallen to a six-month intraday low.
Within the storage sector, shares of Datalink (DTLK) have plunged by 25.9 percent after the company reported weaker than expected first quarter results and provided disappointing guidance.
Internet stocks are also seeing considerable weakness, resulting in a 2.1 percent drop by the Dow Jones Internet Composite Index. Earlier in the session, the index hit its worst intraday level in almost seven months.
Daily deal website Groupon (GRPN) is leading the internet sector lower, tumbling by 19.5 percent after forecasting second quarter earnings below analyst estimates.
Gold, biotechnology, and software stocks also remain under pressure in mid-day trading, while notable strength has emerged among utilities and tobacco stocks.
Meanwhile, shares of Disney (DIS) are seeing modest strength after the entertainment giant reported better than expected fiscal second quarter results due in part to the success of its animated film "Frozen."
Video game maker Electronic Arts (EA) has moved sharply higher after reporting fiscal fourth quarter results that exceeded analyst estimates and providing strong guidance for the current year.
On the economic front, the Labor Department released a report before the start of trading showing that U.S. labor productivity fell by more than anticipated in the first quarter of 2014.
The Labor Department said productivity fell by 1.7 percent in the first quarter following a revised 2.3 percent increase in the fourth quarter. Economists had been expecting productivity to drop by about 1.2 percent.
Partly reflecting the drop in productivity, the report also showed that unit labor costs surged up by 4.2 percent in the first quarter after edging down by 0.4 percent in the fourth quarter. Costs had been expected to increase by 2.8 percent.
Traders are also digesting Federal Reserve Chair Janet Yellen's testimony before the Joint Economic Committee of Congress.
In prepared remarks, Yellen stated that a high degree of monetary accommodation remains warranted in light of the considerable degree of slack that remains in labor markets and the continuation of inflation below the Fed's 2 percent objective.
She said the Fed remains committed to policies designed to restore labor market conditions and inflation to levels consistent with its dual mandate.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness during trading on Wednesday. Japan's Nikkei 225 Index plummeted by 2.9 percent following an extended weekend, while Hong Kong's Hang Seng Index fell by 1.1 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the French CAC 40 Index and the German DAX Index rose by 0.4 percent and 0.6 percent, respectively.
In the bond market, treasuries continue to show a lack of direction after ending the previous session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.59 percent.
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