RTTNews - After snapping three days of losses in the previous session, stocks have turned lower Friday afternoon and are now giving back most of yesterday's gains. The major averages have moved firmly into negative territory after seeing some volatility earlier in the session.
Equities experienced a considerable run up over the course of the past two months, prompting some traders to cash in their gains earlier this week. The move out of stocks has come as earnings season winds down and ahead of an expected lull in the summer months.
Before the opening bell, traders digested data from the Labor Department that showed consumer prices were 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.
Retailers are closing out earnings season, with JC Penney (JCP) reporting first quarter earnings that edged out analyst estimates, while Abercrombie & Fitch (ANF) announced a wider than expected first quarter loss.
In other news, ailing automaker General Motors (GM) said Friday that it has started to notify about 1,100 underperforming and very small sales volume U.S. dealers that it would not retain them on a long-term basis.
The move is a part of GM's updated viability plan submitted last month under which the automaker plans to reduce its current dealer network of 5,969 stores to about 3,600 by the end of 2010.
The major averages have moved to the downside in recent trading, with the Dow and the S&P 500 pulling back to new lows for the session. The Dow is currently down 68.81 at 8,262.51, the Nasdaq is down 5.37 at 1,683.84 and the S&P 500 is down 10.13 at 882.94.
Most Dow components are firmly in negative territory, contributing to the weakness being shown by the blue chip index in mid-afternoon dealing.
General Motors is turning in one of the Dow's worst performances, with shares of the auto giant falling by 5.2 percent. With the loss, GM is poised to ended the session at its worst closing level since the Great Depression.
Bank of America (BAC) is also dragging down the Dow, with shares of the banking giant slipping by 5.5 percent on the session. With the decline, the stock continues to give back recent gains, pulling back further off of a 4-month high set late last week.
Meanwhile, shares of Pfizer (PFE), Intel (INTC) and Chevron (CVX) are also contributing to the pullback in the Dow, falling by at least 2 percent.
Despite the broad based weakness, shares of Alcoa (AA) are seeing some strength, climbing by 3.2 percent on the day. Additionally, shares of Microsoft (MSFT) are bucking the downtrend, rising 1.4 percent.
As the major indices are stuck in negative territory, weakness is visible in most major sectors in mid-afternoon trading.
Notable weakness has emerged among oil service stocks with the Philadelphia Oil Service Index slipping by 3.6 percent on the day. With the loss, the index is pulling back further off the seven-month closing high it set last Friday.
The weakness among oil service stocks comes amid a notable decrease by the price of oil, with crude for June delivery currently down $2.08 at $56.54 a barrel.
Real estate stocks are also showing considerable weakness, dragging the Morgan Stanley Real Estate Sector Index down 5.2 percent. The sector index has now offset yesterday's gain.Banking, natural gas, and healthcare provider stocks have also come under pressure over the course of the trading day.
Despite the day's losses, significant strength remains visible among railroad stocks, as reflected by the 1.7 percent gain currently being shown by the Dow Jones Railroad Index. Transportation stocks have generally benefited from the fall in oil prices on the day.
Some computer hardware stocks are also continue to show strength on the day, helping to prop up the tech heavy Nasdaq.
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. While the U.K.'s FTSE 100 Index closed down 0.3 percent, and the German DAX Index finished just below the unchanged line, the French CAC 40 Index closed up 0.4 percent.
In the bond markets, treasuries are lingering in negative territory, testing their lows of the day. Subsequently, the yield on the benchmark ten-year note is up 3.6 basis points at 3.143 percent.
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