(RTTNews) - Stocks are holding below the unchanged line during early afternoon trading on Thursday, although most have come off of the intraday lows that were hit earlier in the session. The initial weakness came as investors responded negatively to some mixed economic news.

The retail sales report for the month of January was released before the opening bell on Thursday showing an unexpected increase in sales for the month.

According to the Commerce Department report, retail sales rose 1.0 percent in January following a revised 3.0 percent decline in December. Economists had expected sales to fall by 0.8 percent compared to the 2.7 percent decrease originally reported for the previous month.

The increase came as a surprise, although the growth was partly due to significant discounts by retailers following the weak holiday shopping season.

Excluding sales of motor vehicles and parts, retail sales increased by only slightly less, climbing 0.9 percent in January compared to a 3.2 percent decrease in the previous month. Economists had expected the ex-auto sales figure to fall 0.4 percent.

At the same time, the Labor Department said initial jobless claims in the week ended February 7 fell to 623,000 from the previous week’s revised figure of 631,000. Economists had been expecting claims to fall to 610,000 from the 626,000 originally reported for the previous week.

The report also showed that the four-week moving average rose to 607,500 from the previous week’s revised average of 583,500, while continuing claims in the week ended January 31 rose to another new record high of 4.810 million.

In other news, foreclosure filings dropped 10 percent in January, although they were still up 18 percent from the same month in 2008, data from RealtyTrac’s U.S. Foreclosure Market Report revealed Thursday.

The January drop came amid efforts from authorities and lenders to stem the tide of foreclosures. The actions included a moratorium from mortgage giants Fannie Mae and Freddie Mac on all foreclosed sales, as well as moves by individual states to freeze foreclosure activity.

The weakness in the markets also came as some traders are now looking beyond the proposed economic stimulus bill and expressing continued concerns about the efficacy of the Obama administration’s proposed financial rescue plan

Traders continue to wait for the details of the proposed plan after Treasury Secretary Timothy Geithner’s broad outline of the plan contributed to a sell-off on Wall Street on Tuesday.

Nonetheless, the major averages have moved well off their worst levels of the day, with the Nasdaq posting only a modest loss. While the Nasdaq is currently down 3.06 at 1,527.44, the Dow is down 104.02 at 7,835.51 and the S&P 500 is down 9.64 at 824.10.

Sector News

After posting strong gains in the previous session, banking stocks have moved back to the downside during trading on Thursday. The pullback comes as traders cash in on Wednesday’s gains amid concerns about the outlook for the sector.

The weakness in the banking sector is reflected by the 5.8 percent loss currently being shown by the Kbw Bank Sector Index, which has nearly offset the 6 percent gain it posted in the previous session. The index has been rangebound for much of the past month.

Within the sector, one of the widest losses is being posted by Zions Bancorp (ZION), which is down 9.8 percent on the day. With the loss, shares of the regional bank have fallen to their lowest level in almost fourteen years.

Additionally, real estate stocks continue to show substantial weakness on the day, with the Morgan Stanley REIT Index down 4.2 percent on the day.

Significant weakness is also visible among housing stocks, despite the decline in foreclosure filings in January. Subsequently, the Philadelphia Housing Index is down 3.8 percent on the day.

Railroad, brokerage, and utilities stocks are also posting notable losses. The Dow Jones Railroads Index is down 4.3 percent, while the Amex Securities Broker/Dealer Index and the Dow Jones Utilities Average are down 2.4 percent and 2.1 percent, respectively.

At the other end of the spectrum, computer hardware and health insurance stocks are posting notable gains on the day. The Amex Computer Hardware Index is currently up 3.6 percent on strong gains by NetApp (NTAP) and Palm (PALM).

Stocks In The News

Despite the weakness in the broader markets, some stocks are showing notable gains on the day following strong quarterly releases. Buffalo Wild Wings Inc. (BWLD) is up 29.9 percent following the release of its quarterly results, climbing to its highest level in over three months.

The company reported fourth quarter net income of $0.43 per share, compared to $0.34 per share, in the prior year quarter. On average, analysts expected the company to report earnings of $0.39 per share.

Additionally, Sirius XM Radio Inc. (SIRI) is posting a gain of 28.2 percent following media reports that the company is seeking an investment from Liberty Media Corp. Reports described Sirius XM’s plan as a last-ditch effort to fend off an unsolicited takeover approach from Charles Ergen.

A recent WSJ report stated that Charles Ergen’s EchoStar Corp. (SATS) has accumulated a substantial portion of Sirius XM’s maturing debt in an attempt to take control of the embattled company.

Meanwhile, Las Vegas Sands (LVS) is down 9.5 percent on the day after the company reported a GAAP net loss of $0.27 per share for the fourth quarter, compared to net income of $0.11 per share in the prior year quarter. The company also reported an adjusted loss of $0.04 per share, compared to net income of $0.20 per share in the fourth quarter of 2007.

Other Markets

In overseas trading, stock market across the Asia-Pacific region closed considerably lower on Thursday, with Japan’s benchmark Nikkei 225 Index closing down 3 percent.

The major European markets also ended the trading session notably lower, with the U.K.’s FTSE 100 Index closing down 0.8 percent, while the French CAC 40 Index and the German DAX Index ended the session down 2.1 percent and 2.7 percent, respectively.

In the bond markets, treasuries have shown a lack of direction over the course of the session, although the benchmark 10-year note is currently under pressure, driving the yield on the 10-year note up 3.7 basis points at 2.799 percent.

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Posted in Categories: Economy, Eurozone, Japan, Releases, USA.

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