13.12.2013 18:10:11
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Stocks Showing A Lack Of Direction Amid Lingering Fed Worries - U.S. Commentary
(RTTNews) - After failing to sustain an initial upward move, stocks have shown a lack of direction over the course of the trading day on Friday. Uncertainty about the outlook for the Federal Reserve's stimulus program is contributing to the choppy trading.
The major averages have bounced back and forth across the unchanged line and are currently posting modest gains. The Dow is up 17.59 points or 0.1 percent at 15,757.02, the Nasdaq is up 1.50 points or less than 0.1 percent at 3,999.91 and the S&P 500 is up 0.30 points or less than 0.1 percent at 1,775.80.
While bargain hunting contributed to the early strength on Wall Street following three days of losses, buying interest waned not long after the open.
Traders continue to express concerns about the outlook for the Fed's asset purchase program after the House voted to approve a bipartisan budget bill to keep the U.S. government operating for the next two fiscal years.
The House voted 332 to 94 in favor of the bill, which was outlined Tuesday by Rep. Paul Ryan, R-Wis., and Senator Patty Murray, D-Wash.
The budget plan erases the threat of another government shutdown in January and also addresses some of the automatic spending cuts known as the sequester.
Meanwhile, traders have largely shrugged off a report from the Labor Department showing a modest decrease in producer prices in the month of November.
The Labor Department said its producer price index edged down by 0.1 percent in November following a 0.2 percent drop in October. The modest decrease matched economist estimates.
"Wholesale prices fell for the third straight month on lower energy and motor vehicle costs, showing little pipeline pressure for increased consumer prices," said Jay Morelock, an economist at FTN Financial.
He added, "With crude and intermediate goods falling as well, the Fed will not be concerned with upward price pressure as they head into their meeting next week to consider tapering asset purchases."
Core producer prices, which exclude food and energy prices, inched up by 0.1 percent in November after rising by 0.2 percent in October. The uptick in core prices also matched expectations.
Sector News
Most of the other major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Gold stocks are seeing significant strength, however, with the NYSE Arca Gold Bugs Index up by 1.2 percent. The strength among gold stocks comes amid an increase by the price of the precious metal, as gold for February delivery is climbing $12.30 to $1,237.20 an ounce.
On the other hand, oil stocks have come under pressure, moving lower along with the price of crude. With crude for January delivery sliding $1.05 to $96.45 a barrel, the NYSE Arca Oil Index is down by 1.1 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 2225 Index rose by 0.4 percent, while China's Shanghai Composite Index fell by 0.3 percent.
Meanwhile, the major European markets all ended the day on the downside. While the French CAC 40 Index dipped by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both edged down by 0.1 percent.
In the bond market, treasuries are seeing modest strength after coming under pressure over the course of the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 2.861 percent.
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