RTTNews - Stocks are posting notable losses in mid-morning trading on Friday, as traders digest a largely disappointing series of economic reports. The major averages are all in negative territory by substantial margins, offsetting the gains posted in the middle of the week.
Selling pressure was ramped up by the Reuters and University of Michigan preliminary report on consumer sentiment in the month of August, which showed that the consumer sentiment index unexpectedly decreased compared to the previous month.
The 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.
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.
The report showed 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.
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 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.
The major averages have slowed their retreat in recent trading, moving off of their worst levels of the day. The Dow is currently down 121.22 at 9,276.97, the Nasdaq is down 30.26 at 1,979.09 and the S&P 500 is down 14.00 at 998.73.
The major sectors are largely negative, contributing to the considerable pullback by the equity markets in morning trading.
Housing and electronic storage stocks are turning in some of the day's weakest performances, with the Philadelphia Housing Sector Index and the NYSE Arca Disk Drive Index falling by 3.7 percent and 3.4 percent, respectively. While the housing index remains in a trading range, the disk drive index is pulling back off a ten-month closing high set on Thursday.
Oil service, semiconductor and commercial real estate stocks are also retreating, although they largely remain stuck in recent ranges. Airline stocks are also falling by a notable margin, with the NYSE Arca Airline Index posting a loss of 2.6 percent on the day. The index is backing off of the six and a half month closing high set in the previous session.
The index is being led lower by TAM S.A. (TAM), which is down by 5.9 percent, despite announcing a 6.2 percent increase in air traffic in July. The stock is pulling away from yesterday's ten-month closing high.
Steel, biotechnology, trucking, brokerage, defense and a slew of other stocks are also retreating, representing the broad-based weakness in the markets.
Stocks Driven By Analyst Comments
Despite the weakness in the broader markets, shares of Men's Warehouse (MW) are on the rise in mid-morning trading, benefiting from an upgrade by Wedbush Morgan. The broker also raised its target price from $18 to $29. The stock is up by 3.2 percent, reaching its best intraday price in over ten-months earlier in the session.
Columbia Sportswear Company (COLM) is also gaining after the stock received an upgrade from Barclay's Capital. The broker raised its rating on the stock from Equal Weight to Overweight and raised the target price to $45 from $38. Shares of the outdoor apparel firm are up by 3.6 percent, advancing to their best intraday level in nine months.
On the other hand, Barnes & Noble (BKS) is sliding following a downgrade by Credit Suisse, which lowered its rating to Underperform from Neutral. The stock is down by 8 percent, falling further away from a two month closing high posted earlier this week and setting a fresh one month intraday low.
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 are moving lower, with the German DAX Index and the U.K.'s FTSE 100 Index falling by 2 percent and 1.2 percent, respectively, while the French CAC 40 Index is down by 0.8 percent.
In the bond markets, treasuries are seeing notable strength amid the pullback on Wall Street. Subsequently, the benchmark ten-year note is trading at 3.515 percent, posting a loss of 7.6 basis points.
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