Tomahawk, WI 10/19/2011 (PennyPayDay) – Stocks are turning in a lackluster performance in early trading on Thursday, as traders express some uncertainty about the near-term outlook for the markets. The major averages have turned mixed on the day after initially moving to the downside.Currently, the Nasdaq is down 7.02 points or 0.3 percent at 2,597.02, while the Dow is up 24.07 points or 0.2 percent at 11,528.69 and the S&P 500 is up 1.56 points or 0.1 percent at 1,211.44.
The choppy trading come as traders are keeping a close eye on developments out of Europe amid reports that Germany and France are struggling to reach an agreement regarding the enhanced powers of the European Financial Stability Facility bailout fund.
Meanwhile, Reuters said its correspondents have seen documents indicating that the EFSF bailout fund will be able to buy bonds on the secondary market.
In U.S. economic news, the Labor Department released a report showing a modest drop in initial jobless claims in the week ended October 15th, although claims remain above the key 400,000 level.
The report showed that initial jobless claims edged down to 403,000 from the previous week's revised figure of 409,000. Economists had expected claims to drop to 400,000 from the 404,000 originally reported for the previous week.
On the earnings front, credit card giant American Express (AXP) released its third quarter results after the close of trading on Wednesday, reporting earnings of $1.03 per share on revenues of $7.57 billion. Analysts had expected the company to earn $0.96 per share on revenue of $7.58 billion
Telecom giant AT&T (T) reported third quarter earnings of $0.61 per share, in line with analyst estimates. At the same time, the company reported revenues that fell just below expectations.
While most of the major sectors are showing only modest moves, notable weakness is visible among semiconductor stocks, with Cirrus Logic (CRUS) leading the sector lower after providing disappointing third quarter revenue guidance.
Some networking and computer hardware stocks are also under pressure, helping to keep the tech-heavy Nasdaq in negative territory. On the other hand, railroad and tobacco stocks are seeing early strength.
In overseas trading, stock markets across the Asia-Pacific region came under pressure on Thursday following the overnight weakness on Wall Street. Japan's Nikkei 225 Index fell by 1 percent, while Hong Kong's Hang Seng Index dropped by 1.8 percent.
The major European markets are also seeing notable weakness on the day. While the U.K.'s FTSE 100 Index is down by 0.8 percent, the French CAC 40 Index and the German DAX Index are falling by 1.4 percent and 1.7 percent, respectively.
In the bond market, treasuries are seeing modest weakness after ending the two previous sessions roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 2.175 percent.
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