RTTNews - Stocks are continuing to linger near their worst levels of the day in mid-afternoon trading on Friday after the day's key economic data largely fell short of expectations, prompting a sell-off in the equity markets. The major averages are all in negative territory, poised to close lower for the week.

Selling pressure mounted following the release of Reuters and University of Michigan's preliminary report on consumer sentiment in the month of August, which showed that the consumer sentiment index unexpectedly decreased compared to the previous month.

In a separate report, the Federal Reserve revealed that industrial production in the month of July increased by more than economists had been anticipating, boosted by a jump in auto production.

Earlier, traders looked to figures from the Labor Department showing that consumer prices were unchanged in the month of July, with decreases in food and energy prices offsetting higher prices for apparel and tobacco.

The major averages have seen little change in recent trading, extending their choppy performance after reaching their worst levels of the day in the late morning. The Dow is currently down 139.06 at 9,259.13, the Nasdaq is down 36.81 at 1,972.54 and the S&P 500 is down 15.11 at 997.62.

Dow Components

Nearly all of the Dow components are in negative territory in mid-afternoon trading, contributing to the triple digit loss being posted by the blue chip index.

Alcoa (AA) is one of the Dow's worst performers, with the stock sliding by 3.5 percent. Shares of the aluminum producer are pulling back well off the ten-month closing high set on Thursday.

Shares of Boeing (BA) are also retreating after it was revealed that the company ordered an Italian suppler to stop making the fuselage sections of its 787 Dreamliner aircraft after flaws in the fuselage's composite skin were discovered.

The news is just the latest setback for the Boeing much discussed airliner, which is already two years behind schedule. The stock is currently down by 4.1 percent, falling to a one-week low after challenging a six-week high in the previous session.

Caterpillar (CAT), DuPont (DD) and 3M (MMM) are also moving sharply lower, continuing this week's zigzag movement. Meanwhile, shares of JP Morgan Chase (JPM) and Home Depot (HD) are pulling back off roughly ten-month closing highs set on Thursday.

On the other hand, Bank of America (BAC) is bucking the day's downtrend, rising by 2.5 percent. With the gain, Bank of America is poised to close at a fresh eight month high. Coca-Cola (KO) is posting a much more modest gain.

Sector News

Electronic storage, housing and oil service stocks are continuing to turn in disappointing performances in mid-afternoon trading, while chemical stocks are also falling by considerable margins. The S&P Chemical Index is down by 3.1 percent, pulling back off Thursday's ten-month closing high.

Brokerage, biotechnology, gold and steel stocks are also moving sharply lower, with the losses by resource stocks coming amid a drop in commodity prices on the NYMEX.

Networking, railroad, retail and commercial real estate stocks are also pulling back, reflecting the broad based weakness in the equity markets on the day.

In Focus: Economic Data, Earnings News

As mentioned above, the Reuters and University of Michigan report showed that the consumer sentiment index fell to a reading of 63.2 in August from a reading of 66.0 in July. The decrease surprised economists, who had been expecting the index to increase to 69.0.

With the unexpected decrease, the consumer sentiment index fell for the second consecutive month, dropping to its lowest level since March.

Separately, the Federal Reserve revealed that industrial production increased by 0.5 percent in July after falling by 0.4 percent in June. With the increase, industrial production rose for the first time since December of 2007. Economists had been expecting a slightly more modest increase in industrial production of about 0.4 percent.

Meanwhile, the Labor Department said its consumer price index was unchanged in July after increasing by an unrevised 0.7 percent in June. The lack of growth in consumer prices came in line with the expectations of economists.

Excluding the decreases in food and energy prices, the core consumer price index edged up 0.1 percent in July following a 0.2 percent increase in the previous month. Economists had expected the index to increase by 0.1 percent.

In earnings news, J.C. Penney Company (JCP) broke even for the second quarter in terms of earnings per share compared to net income of $0.52 per share in the same quarter last year. Thirteen Wall Street analysts polled by Thomson Reuters expected the company to report a loss of $0.01 per share. Looking forward, the company raised its annual profit outlook.

Abercrombie & Fitch (ANF) reported a second quarter net loss of $0.30 per share, compared to net income of $0.87 per share last year. Wall Street analysts expected the company to report a loss of $0.07 per share. Quarterly sales totaled $648.46 million, beating estimates of $646.46 million.

In other news, Europe's largest carmaker Volkswagen AG agreed to buy a 42 percent stake in the sports car unit of Porsche Automobil Holding SE for about 3.3 billion euro by the end of this year. The agreement is expected to lead to the merger of Porsche with Volkswagen, which is scheduled to be completed in 2011.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished mostly higher on Friday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while Hong Kong's Hang Seng Index climbed up by 0.2 percent. Meanwhile, India's BSE 30 fell by 0.7 percent.

Meanwhile, the major European markets closed notably lower, with the French CAC 40 Index and the U.K.'s FTSE 100 Index falling by 0.8 percent and 0.9 percent, respectively, while the German DAX Index posted a loss of 1.7 percent.

In the bond markets, treasuries are seeing modest gains after moving off of their best levels of the day. Subsequently, the yield on the benchmark ten-year note is trading at 3.559 percent, posting a loss of 3.2 basis points.

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