RTTNews - After seeing significant strength in the previous session, stocks have turned in a lackluster performance over the course of the trading day on Friday. The major averages have had difficulty sustaining any significant moves.
The day's moves have come on relatively low volume following some profit taking earlier this week. Traders decided to cash in on gains ahead of the summer season after equities experienced a considerable run up over the past two months.
Ahead of the open, traders were presented with data from the Labor Department that showed its consumer price index was unchanged in April after edging down by an unrevised 0.1 percent in March. The lack of growth in consumer prices came in line with the economists' expectations.
The report also showed that the core consumer price index, which excludes volatile food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent.
Separately, the Reuters/University of Michigan consumer sentiment index rose to 67.9 in May compared to a reading of 65.1 for April. The index came in above analyst estimates of a reading of 67.0.
Additional economic data came from the Federal Reserve, which released a report showing industrial production fell 0.5 percent in April, following a revised 1.7 percent decrease in March. Economists had been expecting production to fall 0.6 percent.
Another report came from the New York arm of the Federal Reserve, which said its index of regional manufacturing activity rose to a negative 4.6 in May from a negative 14.7 in April, although a negative reading still indicates a contraction in activity. The index had been expected to rise to a negative 12.0.
As earnings season wraps up this week, retailer JC Penney (JCP) reported first quarter earnings that edged out analyst estimates, while Abercrombie & Fitch (ANF) reported a wider than expected first quarter loss.
Elsewhere, in a speech before the Texas Bankers Association, Dallas Federal Reserve Bank Branch President Richard Fisher said the efforts of the Federal Reserve to restore stability to financial markets are showing signs of success.
Fisher said that Fed actions have succeeded in pulling the financial markets and the economy from the edge of the abyss. However, he predicted that positive growth would not resume until the beginning of 2010, adding that he would be surprised if the economy sees a positive GDP number before then.
In other news, insurer and financial services provider Hartford Financial (HIG) announced that it has received preliminary approval for a $3.4 billion participation in the Treasury's Troubled Assets Relief Program, or TARP. Lincoln National (LNC) also revealed that it received approval for a $2.5 billion participation in TARP.
The major averages are currently all in negative territory, although the tech-heavy Nasdaq is posting a relatively modest loss. The Dow is currently down 37.43 at 8,293.89, the Nasdaq is down 1.17 at 1,688.04 and the S&P 500 is down 7.76 at 885.31.
As the major indices have moved into the red, weakness has emerged in most major sectors in early afternoon trading.
Notable weakness has emerged in the utilities sector, with the Philadelphia Utility Sector Index currently down by 2.1 percent. With the decline, the index is pulling back further off the two and a half month high set on Tuesday.
The sector is being led lower by shares of FirstEnergy (FE), which are down by 10.3 percent on the session. At its low for the session, FirstEnergy was at a five-year intraday low.
Real estate stocks are also posting steep losses, dragging the Morgan Stanley Real Estate Sector Index down 3.3 percent. The average is giving back most of the gains posted in the previous session.
Oil service, natural gas, and banking stocks have also come under pressure over the course of the trading day. The losses by oil service stocks come amid a notable decrease by the price of oil.
Despite the day's losses, significant strength remains visible among trucking stocks, as reflected by the 1.8 percent gain currently being shown by the Dow Jones Trucking Index. Transportation stocks are generally higher on the day amid lower oil prices.
Some computer hardware and wireless stocks are also turning in strong performances, helping to prop up the tech heavy Nasdaq.
Stocks in the News
Despite the pullback by the markets, shares of Compuware (CPWR) are seeing considerable upside even though the company reported lower fourth quarter earnings. The company also reported a 28 percent drop in operating expenses. The stock is up by 8.4 percent, climbing to its highest level since early October.
Nordstrom (JWN) is also bucking the day's downtrend after the company posted first quarter net earnings of $81 million or $0.37 per share, firmly beating out analyst estimates of $0.26 per share. With the advance, shares are continuing to recover from a monthly low set on Wednesday.
On the other hand, Blockbuster (BBI) has plunged below a dollar per share as the firm reported first quarter revenues at $1.12 billion, well below analyst expectations of $1.30 billion. Shares have dropped 28.2 percent, returning to late April levels.
In overseas trading, stock markets across the Asia-Pacific region finished mostly higher on Friday. Japan's benchmark Nikkei 225 Index rose 1.8 percent, while Hong Kong's Hang Seng Index climbed 1.5 percent.
Meanwhile, the major European markets turned in a mixed performance. The U.K.'s FTSE 100 Index closed down 0.3 percent, while the German DAX Index finished just below the unchanged line. Meanwhile, the French CAC 40 Index closed up 0.4 percent.
In the bond markets, treasuries have moved off of their lows for the session but remain stuck firmly in negative territory. Subsequently, the yield on the benchmark ten-year note is up 3.6 basis points at 3.143 percent.
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