Midday Market Update: U.S. Stocks Erase Early Losses to Trade Even

By Jennifer Yousfi
Managing Editor

After some choppy trading early in the day, U.S. stocks were relatively flat at midday today (Thursday), with weak European trading, continued economic worries and consumer-spending concerns all playing a role.

At noon, the three major U.S. indices were narrowly mixed after recovering from deeper losses in early morning trading. The blue-chip Dow Jones Industrial Average Index slipped 16.18 points (-0.13%), and was trading at 12,183.92. The tech-laden Nasdaq Composite Index also was down, losing 2.84 points (-0.12%), to reach 2,275.91. But the broader Standard & Poor's 500 Index gained 1.26 points (0.09%), to trade at 1,327.71.

Consumer goods - both cyclical and non-cyclical - and the transportation sector posted small gains. Basic materials, high-tech and healthcare posted the biggest losses of the market sectors.
In overseas markets, trading in China ended early yesterday (Wednesday) in honor of the Chinese New Year holiday. The markets are closed today and tomorrow.

Despite the shortened trading day, Hong Kong's Hang Seng Index managed to plunge 5.4% before the close. Japan's Nikkei Index surged ahead 107.91 points to end at 13,207.20, a 0.82% gain.

European and U.K. stocks slumped on continued economic concerns.  A 25 basis point rate cut by the Bank of England (BOE) was not enough to rally Britain's FTSE indices, while the European Central Bank (ECB) held rates steady at 4.0% despite comments from ECB President Jean-Claude Trichet that "data have confirmed that the risks surrounding the outlook for economic activity lie on the down side." 

Year to date, Germany's DAX is down almost 17%, London's FTSE has dropped 11% and the Paris-based CAC has lost 16%.

"The market thinks the ECB and BOE are slow to react," Tom Fitzpatrick, global head of currency strategy at Citigroup (C) Global Markets Inc. in New York, told Bloomberg News. "The euro-dollar is coming under further pressure."

The greenback was up by 0.88% versus the euro at noon.

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