(RTTNews) - Stocks are turning in a relatively lackluster performance in morning trading on Thursday following the advance seen in the previous session. The major averages have spent the morning bouncing back and forth across the unchanged line.
The major averages have moved to the downside in recent trading and are currently posting modest losses. The Dow is down 19.68 points or 0.1 percent at 27,181.84, the Nasdaq is down 20.50 points or 0.2 percent at 10,977.89 and the S&P 500 is down 6.00 points or 0.2 percent at 3,321.77.
The choppy trading on Wall Street comes as traders look ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.
Economists currently expected employment to jump by about 1.6 million jobs in July after spiking by 4.8 million jobs in June. The unemployment rate is expected to dip to 10.5 percent from 11.1 percent.
Ahead of the monthly report, the Labor Department released a report this morning showing initial jobless claims pulled back by much more than expected in the week ended August 1st following two straight weekly increases.
The report said initial jobless claims tumbled to 1.186 million, a decrease of 249,000 from the previous week's revised level of 1.435 million.
Economists had expected jobless claims to edge down to 1.415 million from the 1.434 million originally reported for the previous week.
With the much bigger than expected decrease, jobless claims dropped their lowest level since the coronavirus-induced lockdowns in mid-March.
"The latest jobless claims data were much better than expected and suggest that the stalling in the labor market recovery in July didn't get worse as the month came to a close," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
"We think there is some risk that the expiration of federal supplemental benefits discouraged some individuals for filing claims," she added. "If that's the case, initial claims would likely bounce back if and when those benefits are renewed."
Traders are also keeping an eye on developments in Washington, as Democrats and Trump administration officials continue to negotiate over a new coronavirus relief bill.
Senate Majority Leader Mitch McConnell, R-Ken., and House Speaker Nancy Pelosi, D-Calif., both expressed confidence an agreement will eventually be reached in separate interviews with CNBC.
Both sides have indicated progress following recent meetings, although Senate Minority Leader Chuck Schumer, D-N.Y., told reporters on Wednesday that "wide differences" remain on certain issues.
With the talks dragging on, the White House has suggested President Donald Trump could extend unemployment benefits and an eviction moratorium by executive order, although it is unclear if he has the authority to do so.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Networking stocks are turning in some of the market's best performances in morning trading, with the NYSE Arca Networking Index surging up by 2.1 percent to its best intraday level in over a year.
CommScope (COMM) has helped to lead the sector higher, spiking by 16.4 percent after reporting second quarter results that beat analyst estimates on both the top and bottom lines.
Substantial strength has also emerged among airline stocks, as reflected by the 2 percent jump by the NYSE Arca Airline Index.
On the other hand, computer hardware stocks have come under pressure on the day, dragging the NYSE Arca Computer Hardware Index down by 1.8 percent.
Hard drive maker Western Digital (WDC) is posting a steep loss after reporting fiscal fourth quarter earnings that beat analyst estimates but providing disappointing guidance.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index rose by 0.3 percent.
Meanwhile, European stocks have moved mostly lower, although Germany's DAX Index has bucked the downtrend and is just above the unchanged line. The U.K.'s FTSE 100 Index is down by 1.1 percent and the French CAC 40 Index is down by 10.6 percent.
In the bond market, treasuries are rebounding following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 0.507 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
