Stocks Fluctuate But Maintain Negative Bias In Mid-Day Trading - U.S. Commentary

(RTTNews) - Following the substantial sell-off that was seen in the previous session, stocks have fluctuated over the course of the trading on Friday. While the markets have largely maintained a negative bias, selling pressure has remained relatively subdued.

The major averages are currently in the red but are well off their lows for the session. The Dow is down 80.31 points or 0.5 percent at 16,089.91, the Nasdaq is down 12.39 points or 0.3 percent at 4,041.72 and the S&P 500 is down 6.69 points or 0.4 percent at 1,826.39.

The weakness visible on Wall Street in mid-day trading partly reflects a negative reaction to quarterly results from JP Morgan (JPM), with the financial giant falling by 3.5 percent.

The pullback by JP Morgan comes after the company reported first quarter earnings that fell year-over-year and came in below analyst estimates. The company also reported weaker than expected revenues for the quarter.

The disappointing results from JP Morgan have added to concerns about the impending earnings season, which will really start to pick up steam next week.

Concerns about the valuation of momentum stocks also continue to weigh on the markets after playing a big part in yesterday's sell-off.

Meanwhile, traders have largely shrugged off a report from the Labor Department showing that U.S. producer prices rose by much more than expected in the month of March.

The Labor Department said its producer price index for final demand advanced by 0.5 percent in March after edging down by 0.1 percent in February. Economists had been expecting the index to tick up by 0.1 percent.

Core producer prices, which exclude food and energy, also rose by 0.6 percent in March following a 0.2 percent drop in the previous month. Core prices had been expected to rise by 0.2 percent.

Reuters and the University of Michigan released a separate report showing a bigger than expected improvement in consumer sentiment in the month of April.

The report showed that the preliminary reading on the consumer sentiment index for April came in at 82.6 compared to the final March reading of 80.0. Economists had expected the index to inch up to a reading of 81.0.

With the bigger than expected increase, Reuters said the consumer sentiment index reached its highest level since last July.

Sector News

A majority of the major sector indices have moved to the downside on the day, although most are showing only modest moves.

Brokerage stocks are seeing significant weakness, however, with the NYSE Arca Broker/Dealer Index down by 1.1 percent. In early trading, the index hit its worst intraday level in almost five months.

Notable weakness has also emerged among housing stocks, as reflected by the 1.1 percent loss being posted by the Philadelphia Housing Sector Index. With the loss, the index is on pace to end the session at a nearly four-month closing low.

Gold, steel, and banking stocks are also seeing some weakness in mid-day trading, while biotechnology stocks have moved modestly higher on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index slumped by 0.8 percent.

The major European markets also came under pressure on the day. While the German DAX Index tumbled by 1.5 percent, the U.K.'s FTSE 100 Index and French CAC 40 Index dropped by 1.2 percent and 1.1 percent, respectively.

In the bond market, treasuries have pulled back near the unchanged line after seeing modest strength earlier in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is unchanged at 2.628 percent.