With traders digesting weak employment data that came in line with expectations along with some upbeat comments from Federal Reserve Chairman Ben Bernanke, stocks are seeing continued uncertainty in mid-afternoon trading on Friday.
Speaking at a symposium on Financial Markets in Charlotte, North Carolina, Bernanke offered encouraging news, saying that programs enacted by the Federal Reserve to unfreeze the credit markets are working. Bernanke praised the actions of policymakers as having lowered the cost and increased the availability of credit.
The bevy of new lending programs offered by the Federal Reserve appear to be achieving their objectives, Bernanke said, having significantly reduced funding pressures for financial institutions, helped to reduce rates in bank funding markets, and increased overall financial stability.
In the midst of extraordinarily challenging times for the financial system and economy, Bernanke stated that he is confident that growth will be restored.
On the economic front, the Labor Department said that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels.
With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in the previous month, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.
While the report points to continued weakness in the labor market, some investors were pleased that it did not show a notable surprise to the downside. Others feel that the weakness was already priced into the markets, as employment data is seen as a lagging indicator.
Separately, the Institute for Supply Management released its report on activity in the service sector for March, showing that its index of activity in the sector unexpectedly fell to 40.8 in March from 41.6 in February, with a reading below 50 indicating a contraction in the sector.
In recent trading, the Nasdaq and the S&P 500 have moved more firmly into positive territory, while the Dow is lingering near the unchanged line. While the Dow is currently up 6.77 at 7,984.85, the Nasdaq is up 11.55 at 1,614.18 and the S&P 500 is up 4.17 at 838.55.
The Dow components are turning in a roughly mixed performance in mid-afternoon trading, helping to keep the blue chip index near the unchanged line.
Microsoft (MSFT) is turning one of the Dow's worst performances, with the software giant currently down 3 percent. With the decline, the stock has pulled back further off of the nearly two-month closing high it set on Wednesday.
Reflecting weakness in the pharmaceutical sector, Merck (MRK), Johnson & Johnson (JNJ), and Pfizer (PFE) are also posting notable losses. Merck is down 2.7 percent, while J&J and Pfizer are both down 1.8 percent.
At the other end of the spectrum, General Motors (GM) and Bank of America (BAC) are posting strong gains. Shares of GM are currently up 3.8 percent, while shares of BofA are up 3.5 percent.
Caterpillar (CAT), General Electric (GE), and Hewlett-Packard (HPQ) are among the other Dow components that are posting notable losses.
As with the broader markets, the major sectors indices are turning in a roughly mixed performance in mid-afternoon trading.
On the upside, real estate stocks are turning in some of the best performances, driving the Morgan Stanley REIT Index up 5.1 percent. With the gain, the index has risen to its best intraday level in over a month and a half.
Oil services, computer hardware and steel stocks are also posting notable gains on the day. While the Philadelphia Oil Services Index is up 4.5 percent, the Amex Computer Hardware Index and the Amex Steel Index are up 3.5 percent and 2.8 percent, respectively.
At the other end of the spectrum, gold and health insurance stocks continue to turn in some of the worst performances of the session. The Amex Gold Bugs Index is down 5.7 percent, while the Morgan Stanley Healthcare Payor Index suffers a 2.8 percent decline.
As mentioned above, notable weakness is also visible in the pharmaceutical sector, as reflected by the 2.1 percent loss currently being shown by the Amex Pharmaceutical Index. Bristol Myers (BMY) is helping to lead the sector lower, falling 5.9 percent.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, adding to the strong gains posted in the previous session. Japan's benchmark Nikkei 225 Index closed up 0.3 percent, although well off its best level of the day.
Meanwhile, the major European markets ultimately ended the session mixed. While the German DAX Index closed up 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index ended Friday's session down 1.1 percent and 2.3 percent, respectively.
In the bond market, treasuries are holding well below the unchanged line, near their lows of the day. Subsequently, the yield on the benchmark 10-year note is up 14.6 basis points at 2.898 percent.
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