Stocks Seeing Modest Strength In Mid-Day Trading - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved modestly higher over the course of the trading day on Thursday. Buying interest has remained somewhat subdued, however, limiting the upside for the major averages.

Currently, the major averages are holding on to slim gains. The Dow is up 33.69 points or 0.2 percent at 21,443.72, the Nasdaq is up 3.80 points or 0.1 percent at 6,237.76 and the S&P 500 is up 3.72 points or 0.2 percent at 2,439.33.

The modest strength on Wall Street comes following the release of the details of the Senate Republican plan to repeal and replace Obamacare.

Healthcare stocks have moved mostly higher following the release of the draft of the bill, although it remains to be seen if the legislation will have enough support to pass.

On the U.S. economic front, the Labor Department released a report before the start of trading showing a modest uptick in first-time claims for unemployment benefits in the week ended June 17th.

The report said initial jobless claims inched up to 241,000, an increase of 3,000 from the previous week's revised level of 238,000. Economists had expected jobless claims to edge up to 240,000.

A separate report from the Conference Board showed that its index of leading economic indicators rose in line with economist estimates in the month of May.

The Conference Board said its leading economic index climbed by 0.3 percent in May after rising by a downwardly revised 0.2 percent in April.

Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board, said the continued upward trend by the index suggests the economy is likely to "remain on, or perhaps even moderately above, its long-term trend of about 2 percent growth for the remainder of the year."

However, traders remain reluctant to make more significant moves amid lingering uncertainty about the near-term outlook for the markets.

Sector News

Drug stocks have also shown a substantial move to the upside on the day, driving the NYSE Arca Pharmaceutical Index up by 1.9 percent to its best intraday level in almost a year.

Within the pharmaceutical sector, Novartis (NVS) is posting a standout gain after trial results revealed its Canakinumab reduces the risk of major adverse cardiovascular events in patients with a prior heart attack.

Significant strength is also visible among gold stocks, with the NYSE Arca Gold Bugs Index climbing by 1.7 percent. The index continues to rebound after ending Tuesday's trading at its lowest closing level in over a month.

The strength among gold stocks comes amid an increase by the price of the precious metal, as gold for August delivery is rising $5.70 to $1,251.50 an ounce.

Healthcare providers are also turning in a strong performance following the release of the Senate Republican healthcare bill, with Community Health Systems (CYH) and Tenet Healthcare (THC) posting notable gains.

Biotechnology, steel, and software stocks are also seeing considerable strength, while weakness remains visible among tobacco and banking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Australia's All Ordinaries Index climbed by 0.7 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index slipped by 0.1 percent, the French CAC 40 Index and the German DAX Index both crept up by 0.2 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.156 percent.