Stocks have shown a lack of direction over the course of morning trading on Friday, extending the volatility seen in the previous session. The major averages have spent the morning bouncing back and forth across the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Dow is down 13.05 points or less than a tenth of a percent at 29,410.26, the Nasdaq is up 13.24 points or 0.1 percent at 9,725.21 and the S&P 500 is up 1.42 points or less than a tenth of a percent at 3,375.36.
Traders have recently shown a predilection toward buying despite signs of mounting headwinds, but the release of a mixed batch of U.S. economic data has finally given them pause.
While the Commerce Department released a report before the start of trading showing U.S. retail sales rose in line with estimates in January, the closely watched core retail sales came in unchanged.
The Commerce Department said retail sales rose by 0.3 percent in January after edging up by a downwardly revised 0.2 percent in December.
Economists had expected retail sales to climb by 0.3 percent, matching the increase originally reported for the previous month.
However, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, were unchanged in January after rising by a downwardly revised 0.2 percent.
Core retail sales were expected to rise by 0.3 percent compared to the 0.5 percent increase originally reported for the previous month.
“After a rare contraction in the fourth quarter, the 3m/3m annualized growth rate of control group sales slipped further to -0.7% in January,” said Andrew Hunter, Senior U.S. Economist at Capital Economics,
He added, “That means there are now clear downside risks to our initial forecast that real consumption growth will rebound back above 2% annualized in the first quarter.”
The Federal Reserve also released a report showing a continued decrease in U.S. industrial production in the month of January, as unseasonably warm weather led to another steep drop in utilities output.
The Fed said industrial production fell by 0.3 percent in January following a revised decrease of 0.4 percent in December. Economists had expected industrial production to dip by 0.2 percent.
Manufacturing output edged down by 0.1 percent in January after inching up by 0.1 percent in December, as Boeing (BA) significantly slowed production of civilian aircraft amid the grounding of its troubled 737 Max.
Meanwhile, the University of Michigan released a report showing an unexpected increase in U.S. consumer sentiment in the month of February.
Preliminary data showed the consumer sentiment index rose to 100.9 percent in February from the final January reading of 99.8. The uptick surprised economists, who had expected the index to edge down to 99.5.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Notable weakness is visible among networking stocks, however, with the NYSE Arca Networking Index slumping by 1.1 percent.
Arista Networks (ANET) is posting a steep loss even though the networking company reported better than expected fourth quarter results.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index slid by 0.6 percent, while China’s Shanghai Composite Index rose by 0.4 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index is just below the unchanged line, the French CAC 40 Index and the U.K.’s FTSE 100 Index are down by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries have moved higher over the course of the morning, adding to yesterday’s modest gains. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 1.576 percent.
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