WASHINGTON (dpa-AFX) - Stocks moved to the upside early in the session on
Thursday but fluctuated over the course of the trading day before eventually
closing modestly lower. The major averages partly offset the strong upward move
seen over the two previous sessions.

While the Dow climbed above 40,000 for the first time in morning trading, the
blue chip index ended the day down 38.62 points or 0.1 percent to 39,869.38. The
S&P 500 dipped 11.05 points or 0.2 percent to 5,297.10 and the Nasdaq fell 44.07
points or 0.3 percent to 16,698.32.

The early strength on Wall Street reflected an extension of the rally seen
during Wednesday's session, which came amid optimism about the outlook for
interest rates following tamer-than-expected consumer price inflation data.

A closely watched Labor Department showed consumer prices rose by less than
expected in April, reinforcing expectations the Federal Reserve will lower
interest rates in the coming months.

According to CME Group's FedWatch tool, the chances rates will be a quarter
point lower by September have reached 85.5 percent.

Buying interest waned over the course of the session, however, with traders
seemingly pausing to assess the near-term outlook for the markets after the
major averages reached new record highs.

On the U.S. economic, the Labor Department released a report this morning
showing a pullback by initial jobless claims in the week ended May 11th.

The Labor Department said initial jobless claims slid to 222,000, a decrease of
10,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to fall to 220,000 from the 231,000
originally reported for the previous week.

The pullback came after jobless claims rose to their highest level since the
week ended August 26, 2023 in the previous week.

Meanwhile, traders largely shrugged off a separate Labor Department report
showing U.S. import prices jumped by much more than expected in April.

The report said import prices shot up by 0.9 percent in April after climbing by
an upwardly revised 0.6 percent in March.

Economists had expected import prices to rise by 0.3 percent compared to the 0.4
percent increase originally reported for the previous month.

The annual rate of growth by import prices also accelerated to 1.1 percent in
April from 0.4 percent in March, reflecting the largest over-the-year increase
since December 2022.

'The surge in April import prices won't instill the Fed with greater confidence
inflation is decelerating, but officials will assuredly put much more stock in
yesterday's CPI report which was a small step in the right direction and keeps a
rate cut in September, our baseline forecast, firmly on the table,' said Matthew
Martin, U.S. Economist at Oxford Economics.

A separate report released by the Fed showed U.S. industrial production came in
flat in the month of April, with a surge in utilities output offset by decreases
in mining and manufacturing output.

The Fed said industrial production came in unchanged in April after inching up
by a downwardly revised 0.1 percent in March.

Economists had expected industrial production to edge up by 0.1 percent compared
to the 0.4 percent increase originally reported for the previous month.

Sector News

While most of the major sectors showed only modest moves on the day, housing
stocks moved sharply lower, dragging the Philadelphia Housing Sector Index down
by 2.8 percent.

The index pulled back off its best closing level in well over a month after a
Commerce Department report showed a rebound by housing starts in April but a
continued slump by building permits.

Airline stocks also showed a significant move to the downside, with the NYSE
Arca Airline Index falling by 1.4 percent.

Computer hardware stocks also gave back ground after surging during Wednesday's
session, while tobacco stocks moved notably higher, driving the NYSE Arca
Tobacco Index up by 1.3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly
higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.4
percent, while Hong Kong's Hang Seng Index surged by 1.6 percent.

Meanwhile, the major European markets moved to the downside on the day. While
the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and
the German DAX Index slid by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries moved modestly lower over the course of the
session after seeing initial strength. As a result, the yield on the benchmark
ten-year note, which moves opposite of its price, rose 2.1 basis points to 4.377
percent.

Looking Ahead

Following the slew of U.S. data released over the past two days, the economic
calendar is relatively quiet on Friday, although the Conference Board's report
on leading economic indicators in April may still attract some attention.



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