Before the start of trading this morning, the Labor Department reported that initial jobless claims rose to 479,000 in the week ended July 31st from the previous week’s revised figured of 460,000.
The increase came as a surprise to economists, who had expected jobless claims to edge down to 455,000 from the 457,000 originally reported for the previous week.
While weekly jobless claims rose to their highest level in over three months, Peter Boockvar, equity strategist at Miller Tabak, noted that jobless claims in July have been impacted by auto plant shutdowns or the lack thereof with respect to GM.
“Notwithstanding the seasonal noise in July, the level of claims remains stubbornly high and still point to a sluggish labor market,” Boockvar said.
He added, “While tomorrow we will hopefully see an expected 90,000 added to the private sector roles, the pace remains below what is needed to absorb the monthly additions to the labor force.”
Market focus has also been on the retail sector this morning, with a number of key chain stores reporting comparable July store sales. BJ’s Wholesale (BJ) reported that its July comps rose by 6 percent, Nordstrom (JWN) said its sales increased by 7.6 percent, Kohl’s (KOHL) sales advanced by 7.1 percent and sales by Macy’s (M) jumped by 11 percent.
In earnings news, Beazer Homes (BZH) reported a third-quarter net loss that was narrower than last year but still worse than expected. Meanwhile, revenues comfortably beat estimates.
Healthcare giant CIGNA Corp.’s (CI) second-quarter net income and revenues came in above expectations, while the lower end of the firm’s full-year earnings guidance was in-line with forecasts.
Freight transportation and logistics services company Con-way Inc. (CNW) posted second-quarter net income that was nearly 24 percent higher compared to the same period last year but still missed projections.
In other corporate news, BP Plc (BP) remains in the spotlight as the firm is conducting a cementing procedure, looking to permanently seal its burdensome oil well in the Gulf of Mexico.
The major averages have climbed well off their worst levels of the day, but they currently remain stuck in the red. The Dow is down 20.05 points or 0.2 percent at 10,660.38, the Nasdaq is down 6.27 points or 0.3 percent at 2,297.30 and the S&P 500 is down 2.65 points or 0.2 percent at 1,124.59.
Health insurance stocks are among the morning’s worst performers, with the Morgan Stanley Healthcare Payor Index falling by 1.5 percent. The slide is dragging the index down off of the six-week closing high set in the previous session.
The sector is being led lower by Molina Healthcare (MOH), which has plunged by 11.4 percent. The loss by Molina comes after the company reported second quarter earnings that fell year-over-year and announced a public offering of 4 million shares of its common stock.
Trucking stocks are also under pressure, dragging the Dow Jones Trucking Index down by 1.2 percent. With the loss, the index is falling from the nearly two year closing high set at the end of yesterday’s session.
Banking, computer hardware and tobacco stocks are also trading lower, while modest strength is visible among oil service and airline stocks.
Stocks Driven By Analyst Comments
Despite a largely down performance in the markets thus far, Savient Pharmaceuticals (SVNT) is higher after being upgraded by analysts at Bank of America to Neutral from Underperform. The broker cited the likelihood of a big drug approval for the firm in September as a reason for the ratings change.
Savient stock has gained 3.9 percent and although it has not taken out recent intraday highs, it is on pace for a three-month closing high.
Meanwhile, Rayonier (RYN) is trading lower after being downgraded at JP Morgan Chase from Neutral to Underweight based on recent valuation. Shares are currently down by 2 percent, pulling back further off of the all-time closing high set earlier this week.
Hub Group (HUBG) is also down following a downgrade at UBS from Buy to Neutral also based on recent valuation. The stock is down by 3 percent, slipping from the six-week closing high set on Wednesday.
In overseas trading, stock markets across the Asia-Pacific region ended on a mixed note on Thursday. Japan’s benchmark Nikkei 225 gained 1.7 percent, while the Shanghai Composite Index sank by 0.7 percent.
The major European markets are also turning in a mixed performance. The U.K.’s FTSE 100 Index is down by 0.1 percent, while the French CAC 40 Index and the German DAX Index are up by 0.2 percent and 0.4 percent, respectively.
In the bond markets, treasuries are modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.926 percent, posting a loss of 2.6 basis points