Stocks Showing A Lack Of Direction Following Mixed Data - U.S. Commentary

(RTTNews) - With traders digesting another mixed batch of U.S. economic data, stocks are turning in a relatively lackluster performance in early trading on Friday. The major averages are showing only modest moves after ending the previous session firmly in positive territory.

Currently, the major averages are turning in a mixed performance. While the S&P 500 is up 0.47 points or less than a tenth of a percent at 1,920.50, the Dow is down 18.17 points or 0.1 percent at 16,680.57 and the S&P 500 is down 3.88 points or 0.1 percent at 4,244.07.

Early selling pressure was seen following the release of a report showing an unexpected drop in personal spending in April, but the negative sentiment was offset by a separate report showing an acceleration in Chicago-area business activity in May.

Before the start of trading, the Commerce Department released a report showing that personal spending edged down by 0.1 percent in April after surging up by 1.0 percent in March. The modest decrease surprised economists, who had expected spending to rise by 0.2 percent.

The unexpected drop in spending came despite a continued increase in personal income, which rose by 0.3 percent in April following a 0.5 percent increase in March. The increase marked the fourth straight month of growth and matched expectations.

Meanwhile, MNI Indicators recently released a separate report showing that its reading on Chicago-area business activity unexpectedly rose to a seven-month high in May.

MNI Indicators said its Chicago business barometer climbed to 65.5 in May from 63.0 in April, with a reading above 50 indicating an increase in activity. The increase surprised economists, who had expected the barometer to dip to 61.0.

Thomson Reuters and the University of Michigan also released a report showing a slight upward revision to their reading on consumer sentiment in May.

The data has generated some uncertainty about the near-term outlook for the markets after recent gains lifted the S&P 500 to new record highs.

Most of the major sectors are showing only modest moves, although steel stocks have come under pressure amid concerns about global demand. Reflecting the weakness in the steel sector, the NYSE Arca Steel Index has tumbled by 1.8 percent.

Biotechnology and networking stocks are also seeing some early weakness, while modest strength has emerged among banking stocks.

Among individual stocks, shares of Pacific Sunwear (PSUN) have fallen sharply after the teen apparel retailer reported a narrower than expected first quarter loss but provided disappointing guidance.

Apparel retailer Express (EXPR) has also come under pressure after reporting weaker than expected first quarter earnings and forecasting second quarter earnings below analyst estimates.

On the other hand, shares of Big Lots (BIG) are seeing early strength after the closeout retailer reported better than expected first quarter earnings. The company also raised its full-year earnings outlook.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index dropped by 0.3 percent, while China's Shanghai Composite Index edged down by 0.1 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is just below the unchanged line, the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.3 percent and 0.5 percent, respectively.

In the bond market, treasuries are giving back ground after moving notably higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.9 basis points at 2.486 percent.