U.S. Stocks Show Yet Another Turnaround After Seeing Early Weakness

(RTTNews) - Extending the extreme volatility seen throughout the week, stocks have shown another significant turnaround during trading on Friday. After moving to the downside early in the session, the major averages have bounced well off their lows and into positive territory.

The major averages have pulled back off their best levels in recent trading but currently remain positive. The Dow is up 106.58 points or 0.3 percent at 34,267.36, the Nasdaq is up 218.68 points or 1.6 percent at 13,571.46 and the S&P 500 is up 42.14 points or 1 percent at 4,368.65.

The turnaround on Wall Street reflects an extension of the rollercoaster ride the markets have been on this week, with the major averages showing wild swings back and forth even within a single day.

Tech giant Apple (AAPL) has helped to lead the way back to the upside, spiking by 5.7 percent after reporting better than expected quarterly results.

Credit card giant Visa (V) has also moved sharply higher after reporting fiscal first quarter results that exceeded analyst estimates on the top and bottom lines.

On the other hand, shares of Chevron (CVX) have come under pressure after the energy giant reported fourth quarter earnings that missed analyst estimates.

Fellow Dow component Caterpillar (CAT) has also moved notably lower as supply chain concerns overshadow the construction equipment maker's better than expected quarterly results.

Traders are also digesting a report from the Commerce Department showing core consumer price growth accelerated to a nearly 40-year high in December.

The Commerce Department's reading on inflation, which is said to be preferred by the Federal Reserve, showed the annual rate of core consumer price growth accelerated to 4.9 percent in December, reaching the highest level since September 1983.

At the same time, the report also showed personal spending fell by 0.6 percent in December after rising by 0.4 percent in November. The decrease in spending matched economist estimates.

Excluding price changes, real personal spending tumbled by 1.0 percent in December after slipping by 0.2 percent in the previous month.

"Even assuming a bounce-back for each of the three months of the first quarter, which seems unlikely given that Omicron and the child tax credit expiry will weigh on spending in January, the devastatingly weak end to the previous quarter means that we expect first-quarter real consumption growth to be unchanged overall," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

"Add in a slower pace of inventory accumulation, and we currently have first-quarter GDP growth tracking at -0.5% annualized," he added. "To our minds, despite the strength of price and wage inflation, it is disappointingly weak real economic growth that will prevent the Fed from delivering a full-blown Ratemaggedon this year."

Sector News

Software stocks have shown a significant move to the upside over the course of the session, driving the Dow Jones U.S. Software Index up by 1.9 percent.

Considerable strength has also emerged among biotechnology stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Biotechnology Index.

On the other hand, airline stocks have climbed well off their worst levels but continue to see notable weakness, resulting in a 1.8 percent drop by the NYSE Arca Airline Index.

Gold stocks have also moved to the downside along with the price of the precious metal. With gold for April delivery falling $11.90 to $1,783.10 an ounce, the NYSE Arca Gold Bugs Index is down by 1.8 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 225 Index spiked by 2.1 percent, while China's Shanghai Composite Index slumped by 1 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slid by 0.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index tumbled by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries have moved higher over the course of the session after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 1.784 percent.