RTTNews - Stocks opened modestly lower on Friday and remain weak in mid-morning trading as traders largely shrugged off the day's consumer sentiment and pricing data. The major averages are all in negative territory as traders are doing some profit taking ahead of the weekend.
Consumer sentiment has continued to improve in the month of June, according to a report released by Reuters and the University of Michigan, although the consumer sentiment index rose by less than expected.
The report showed the preliminary reading of the consumer sentiment index for June came in at 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to a reading of 69.5.
Separately, a report from the Labor Department showed that import prices climbed by 1.3 percent in May, compared to a 1.1 percent increase in April. Export prices also rose, climbing by 0.6 percent in May following an increase of 0.4 percent in the previous month.
Compared to the same month a year ago, import prices fell 17.6 percent, while export prices slipped by 6.5 percent.
On the corporate front, investment management company BlackRock (BLK) said Thursday evening that it has agreed to acquire Barclays Global Investors, the asset management arm of U.K.-based financial services provider Barclays (BCS) for $13.5 billion.
The deal also includes iShares, Barclays' exchange traded fund platform. The cash and stock transaction will create the world's largest asset management firm with total combined assets managed of over $2.7 trillion.
Chipmaker National Semiconductor Corp. (NSM) said Thursday after the markets closed that it swung to a fourth quarter loss, hurt by lower sales as well as severance and restructuring costs.
The firm reported a loss of $0.28 per share, compared to net income of $0.34 per share in the same quarter last year. Wall Street analysts expected a loss of $0.38 per share.
Meanwhile, Delta Air Lines (DAL), the world's largest airline operator, said it will cut system capacity by 10 percent, while AMR (AMR), the parent of American Airlines, announced additional steps to handle the difficult demand environment, including further reductions in seating capacity.
The major indices are currently all in the red, although they have moved off of their worst levels of the day in recent trading. The Dow is down 23.81 at 8,747.11, the Nasdaq is down 24.49 at 1,837.88 and the S&P 500 is down 4.89 at 940.00.
A vast majority of the major sectors are moving to the downside, contributing to the moderate pullback seen by the major averages on the day.
Some of the day's weakest performers have been oil service stocks, with the Philadelphia Oil Service Index falling by 2.7 percent on the day. With the retreat, the index is backing off of the eight-month high set in the previous session.
The pullback by oil service comes as the price of oil is showing a notable decline, with crude for July delivery currently down $0.80 at $71.88 a barrel. Oil ended the previous session at its highest closing level since October.
Steel, gold, and natural gas stocks are also pulling back on the day, as traders are doing some profit taking following the recent run-up in the commodity markets.
Additional weakness has also emerged among semiconductor and trucking stocks, with the Philadelphia Semiconductor Index and the Dow Jones Trucking Index falling by 3.2 percent and 2.6 percent, respectively.
Biotechnology, electronic storage, and networking stocks are also retreating, reflecting the day's broad-based weakness.
Bucking the day's downtrend are pharmaceutical stocks, with the NYSE Arca Pharmaceutical Index rising by 1.3 percent. With the advance, the index has reached its best intra-day level in nearly four months.
Stocks Driven By Analyst Comments
Shares of Quicksilver Resources (KWK) are sliding in mid-morning trading after a downgrade by KeyBanc Capital Markets to Hold from Buy. The stock is down by 5.5 percent on the day, backing off of its best closing level in eight months set in the previous session.
Diversified entrepreneurial firm Andersons (ANDE) is also falling following a downgrade by BB&T Capital Markets, which lowered its rating on the stock from Buy to Hold. Shares of Andersons are down by 2.9 percent, backing further away from its best level in over seven months reached earlier this week.
On the other hand, Saks (SAKS) are rising, bolstered by an upgrade by Deutsche Securities, which raised its rating on the stock from Hold to Buy and raised its target price from $6 to $7. Shares of the luxury retailer are up by 17.3 percent in mid-morning dealing, climbing to their best level since early June.
In overseas trading, stock markets across the Asia-Pacific region ended Friday's session largely on the upside. Japan's benchmark Nikkei 225 Index closed up by 1.6 percent, while Hong Kong's Hang Seng finished up by 0.5 percent.
Meanwhile, the major European markets continue to tread on the downside. The German DAX Index is down 1 percent, while the French CAC 40 Index is down by 0.1 percent. The U.K.'s FTSE 100 Index is also slipping, down by 0.5 percent.
In the bond markets, treasuries are extending their morning gains, prompted by the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.79 percent, a fall of 6.8 basis points on the day.
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