Major Averages Well Off Worst Levels But Remain Modestly Lower

Stocks showed a notable move to the downside in early trading on Thursday but have regained ground over the course of the session. The major averages have climbed well off their lows of the session but remain in negative territory.

Currently, the major averages are modestly below the unchanged line. The Dow is down 32.11 points or 0.1 percent at 33,864.90, the Nasdaq is down 7.07 points or 0.1 percent at 12,150.16 and the S&P 500 is down 7.45 points or 0.2 percent at 4,147.07.

The early weakness on Wall Street partly reflected a negative reaction to the latest earnings news from several big-name companies.

Shares of Tesla (TSLA) have plunged by 9.1 percent after the electric vehicle maker reported a steep drop in first quarter earnings amid disappointing profit margins.

Telecom giant AT&T (T) is also posting a steep loss after reporting first quarter earnings that exceeded analyst estimates but weaker than expected revenues.

Shares of America Express (AXP) have also moved to the downside after the credit card giant reported first quarter earnings that missed expectations.

Meanwhile, shares of IBM Corp. (IBM) are seeing modest strength after the tech giant reported better than expected first quarter earnings.

The early selling pressure may have been partly offset by a pullback by treasury yields, which gave back ground following the release of some disappointing U.S. economic data.

Sector News

Tobacco stocks continue to see substantial weakness on the day, with the NYSE Arca Tobacco Index slumping by 2.5 percent after ending the previous session at its best closing level in well over a month.

Significant weakness is also visible among banking stocks, as reflected by the 1.6 percent drop by the KBW Bank Index. The index also ended Wednesday’s trading at a one-month closing high.

Telecom stocks are also seeing considerable weakness on the disappointing results from AT&T, dragging the NYSE Arca North American Telecom Index down by 1.5 percent.

Energy, computer hardware and airline stocks are also seeing notable weakness on the day, while housing stocks have moved sharply higher, driving the Philadelphia Housing Sector Index up by 2.3 percent.

D.R. Horton (DHI) has helped lead the housing sector higher after reporting better than expected fiscal second quarter results.

Semiconductor stocks have also shown a strong move to the upside over the course of the session, with the Philadelphia Semiconductor Index climbing by 1.3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.2 percent, while South Korea’s Kospi fell by 0.5 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index crept up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index slid by 0.6 percent.

In the bond market, treasuries have moved notably higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.4 basis points at 3.538 percent.

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