Dow Falters While S&P Extends Win Streak To 5 Days

The major American stock indices got off to a decent start on Thursday. Two positive economic reports, including a surprise decrease in initial unemployment claims seemed to be setting the stage for a nice rally. Nevertheless, at 11:00 EDT the major stock indices began heading south.

Among the theories discussed for the deflated enthusiasm included a number of reports focused on Europe. A former ECB official voiced his opposition to a sovereign bond-buying program while several reports discussed a survey of ECB economists which portrayed a grim outlook on the European recession.

On the domestic front, Thursday’s report from the Mortgage Bankers’ Association disclosed that the trend of declining mortgage delinquencies had just reversed, consistent with the economic slowdown during the first half of 2012. As the report suggested, this might just be a temporary blip, depending on the direction of employment during the rest of the year.

The major European stock indices made slight moves on Thursday. Novo Nordisk (NYSEARCA:NVO) carried the day for the STOXX 50, as the company raised its full-year profit forecast. Germany’s DAX Index remained in the red following the downbeat economic data reported Thursday (NYSEARCA:EWG).

The Euro STOXX 50 Index finished Thursday’s session with a 0.20 percent advance to 2,437 (NYSEARCA:FEZ). The FTSE 100 Index rose 0.10% to 5,851 (NYSEARCA:EWU).

European ETFs had a bad day on Thursday. The SPDR Euro STOXX 50 ETF (NYSEARCA:FEZ) fell 0.51 percent, despite the fact that the actual Euro STOXX 50 Index finished Thursday’s trading session with a gain of 0.20 percent. The iShares Germany Index (NYSEARCA:EWG) declined by 0.48 percent. The iShares Spain Index (NYSEARCA:EWP) sank 1.22 percent. The iShares Italy Index (NYSEARCA:EWI) fell 1.06 percent.

As of 5:27 EDT, the euro declined 0.01% against the dollar, trading at $1.2305 (NYSEARCA:FXE).

Spain’s ten-year bond yield climbed as high as 6.88 percent on Thursday from Wednesday’s closing level of 6.84 percent (NYSEARCA:EWP).

Italy’s ten-year bond yield climbed as high as 5.95 percent on Thursday from Wednesday’s closing level of 5.92 percent (NYSEARCA:EWI).

On London’s ICE Futures Europe Exchange, September futures for Brent Crude Oil advanced by $1.13 (1.02%) to $111.70/bbl. (NYSEARCA:USO).

August gold futures advanced by $4.10 (0.25%) to $1,617.00 per ounce (NYSEARCA:GLD).

At the closing bell, the Dow dropped 10 points to reach 13,165 for a loss of 0.08 percent. The S&P 500 achieved a 0.04 percent gain for the day, to close at 1,402 (NYSEARCA:SPY). The Nasdaq advanced by 0.25 percent to finish at 3,018 (NASDAQ:QQQ). The Russell 2000 gained 0.34 percent to finish the day at 802 (NYSEARCA:IWM).

Friday brings us the report on import and export prices for June.

Bottom line: The major American stock indices struggled on Thursday, despite a surprising decrease in initial unemployment claims and a better-than-expected narrowing of the trade deficit.

Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.