Nasdaq Remains Firmly Positive But Dow Turns Negative - U.S. Commentary


(RTTNews.com) - Stocks remain mostly positive in mid-day trading on Thursday after an early move to the upside. The tech-heavy Nasdaq has reached a new record intraday high, although the narrower Dow has pulled back into negative territory.

Currently, the major averages are turning in a mixed performance. While the Dow is down 16.04 points or 0.1 percent at 25,185.16, the Nasdaq is up 60.89 points or 0.8 percent at 7,756.59 and the S&P 500 is up 7.68 points or 0.3 percent at 2,783.31.

The advance by the Nasdaq is partly due to continued strength among media stocks, with 21st Century Fox ( FOXA ) extend the strong upward seen in the previous session.

Fox is moving notably higher after Comcast ( CMCSA ) announced a $65 billion bid for most of the company's media assets, igniting a potential bidding war with Disney ( DIS ).

Meanwhile, a notable decline by shares of General Electric ( GE ) is weighing on the Dow, with the industrial conglomerate slumping by 1.9 percent.

The drop by GE comes after CEO John Flannery told French Finance Minister Bruno Le Maire the company's commitment to create 1,000 jobs by the end of 2018 as part of its acquisition of Alstom's energy business is now out of reach.

Earlier in the day, buying interest was generated by the release of some upbeat economic data, including a report from the Commerce Department showing a much bigger than expected increase in retail sales in the month of May.

The Commerce Department said retail sales jumped by 0.8 percent in May after climbing by an upwardly revised 0.4 percent in April. Economists had expected retail sales to rise by 0.4 percent.

Excluding sales by motor vehicle and parts dealers, retail sales still surged up by 0.9 percent in May following a 0.4 percent increase in April. Ex-auto sales had been expected to climb by 0.5 percent.

A separate report from the Labor Department unexpectedly showed a modest decrease in initial jobless claims in the week ended June 9th.

The report said initial jobless claims edged down to 218,000, a decrease of 4,000 from the previous week's unrevised level of 222,000. Economists had expected initial jobless claims to inch up to 224,000.

Traders are also digesting the European Central Bank's highly anticipated monetary policy announcement, with the ECB revealing plans to wind down its massive bond-buying program.

The ECB said it plans to reduce the monthly pace of its net asset purchases to 15 billion from 30 billion after September before completely ending the program at the end of December.

Meanwhile, the ECB left interest rates unchanged and said it expects rates to remain at their present levels at least through the summer of 2019.

Sector News

Most of the major sectors continue to show only modest moves on the day, although considerable strength has emerged among biotechnology stocks.

Reflecting the strength in the biotech sector, the NYSE Arca Biotechnology Index has climbed by 1.1 percent to its best intraday level in well over four months.

Utilities, telecom, and semiconductor stocks are also seeing some strength in mid-day trading, while banking stocks have shown a notable move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the downside during trading on Thursday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index dropped by 0.9 percent.

Meanwhile, the major European markets moved significantly higher following the ECB announcement. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, the French CAC 40 Index and the German DAX Index surged up by 1.4 percent and 1.7 percent, respectively.

In the bond, treasuries are regaining some ground following the pullback seen late in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 2.954 percent.


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