Stocks are building on Wednesday's gains as an easing in Russia aggression in Ukraine and upbeat earnings from retailers overshadows a much larger-than-expected gain in initial jobless claims. All three major indices are holding respectable gains with the S&P 500 chipping away at key resistance of 1952.50 and outperforming the blue-chip and tech market indices.
Initial jobless claims jumped 21,000 to a 6-week high of 311,000, much greater than street estimates for a modest gain of 6,000. The week prior was revised upward by 1,000 to 290,000. But while the weekly indicator posted a significant gain, jobless claims remain at pre-recession lows and the 4-week average, a more accurate indicator of layoffs, rose by only 2,000 to 295,750.
Other data on Thursday included a 0.2% decline in import prices, and unchanged export prices in July. Estimates were looking for import and export prices to fall 0.2% and 0.1%, respectively.
But despite unfriendly economic data, stocks were higher at the open and continued to grind higher on the back of concessions by Russian President Vladimir Putin who said he does not want to challenge the West over the issue of Crimea annexation. While this lured back risk-adverse investors, Wall Street remains cautious for any developments that could unsettle the region and reintroduce geo-political pressures.
European markets were also buoyed by calm in Eastern Europe which offset much worse than expected EU-zone GDP. Following on the heels of Italy's economic contraction, Germany said that growth contracted 0.2% for Q2, resulting in flat EU-zone GDP. Fearing a double-dip recession, investors bailed out of the euro, but left the equity markets unchanged as the likelihood for greater EU liquidity underpins the major stock indices. German bund yields fell to record lows, pushing the spread between U.S. and German government bonds to 140 basis points.
In corporate earnings, Wal-Mart ( WMT ) posted a 3% increase in Q2 revenue, but cut its full year earnings forecast due to higher government health-care costs. Kohl's ( KSS ) had better-than-expected earnings but on a 1.3% drop in revenue, while Cisco ( CSCO ) reported a 1% decline in Q4 profit and 0.5% decline in revenues, but topped analysts estimates.
Crude oil was down $1.31 to $96.33 per barrel. Natural gas was up $0.10 to $3.96 per 1 million BTU. Gold was down $1.10 to $1,313.10 an ounce, while silver was up $0.03 to $19.88 an ounce. Copper was down $0.02 to $3.11 per pound.
Among energy ETFs, the United States Oil Fund was down $1.56 to $35.46 with the United States Natural Gas Fund was up 2.52% to $21.59. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.21% to 27.28 while SPDR Gold Shares were up 0.02% to $126.20. The iShares Silver Trust are up 0.13% to $19.07.
Here's where the U.S. markets stand at mid-day:
NYSE Composite Index up 35.63 (+0.33%) to 10,791.81
Dow Jones Industrial Average up 41.35 (+0.25%) to 16,693.15
S&P 500 up 5.61 (+0.29%) to 1,952.33
Nasdaq Composite Index up 9.69 (+0.22%) to 4,443.82
Nikkei 225 Index up 0.66%
Hang Seng Index down 0.36%
Shanghai China Composite Index down 0.74%
FTSE 100 Index up 0.43%
CAC 40 up 0.25%
DAX up 0.29%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 0.31%
NYSE Financial Sector Index up 0.43%
NYSE Healthcare Sector Index up 0.70%
(+) INPH (+35.91%) Sets $3.3 mln private placement to fund Penveu launch.
(+) FREE (+15.90%) Regains compliance with Nasdaq Minimum Stockholders' Equity rule.
(+) PFIE (+7.88%) Fiscal Q1 results top street views, guidance reiterated.
(-) MTLS (-12.49%) Q2 loss in line with estimates, revenue tops expectations.
(-) LRN (-15.13%) Reported better than expected fiscal Q4 results.
(-) RRGB (-21.12%) Reports Q2 EPS well below estimates.
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