RTTNews - After seeing moderate gains in the previous session, stocks are showing considerably uncertainty in mid-morning trading on Friday. Stocks surged higher at the open as traders reacted to an encouraging employment report, but they were unable to hold their gains and have been swinging between gains and losses since.
Employment fell by much less than expected in the month of May, according to a report released by the Labor Department on Friday, although the unemployment rate rose more than expected to reach a new twenty-five year high.
The report showed that non-farm payroll employment fell by 345,000 jobs in May following a revised decrease of 504,000 jobs in April. Economists had expected a decrease of about 520,000 jobs compared to the loss of 539,000 jobs originally reported for the previous month.
At the same time, the Labor Department said that the unemployment rate jumped to 9.4 percent in May from 8.9 percent in April. With the increase, the unemployment rate came in above economist estimates of 9.2 percent and rose to its highest level since August of 1983.
On the corporate front, Anglo-Australian mining giant Rio Tinto (RTP) are moving higher after the company entered into a joint venture agreement with rival BHP Billiton and scrapped its $19.5 billion deal with Chinalco.
In lieu of its deal with Chinalco, Rio Tinto instead launched a heavily discounted $15.2 billion rights issue. The company also reported a decline in fiscal 2009 first-quarter earnings, adversely impacted by price movements and production volumes amid the downturn in economy.
Elsewhere, the Federal Deposit Insurance Corp. is pushing for a shake-up of Citigroup's (C) top management, imperiling Chief Executive Vikram Pandit, the Wall street Journal reported, citing people familiar with the matter.
The Journal reported that under Chairman Sheila Bair, the FDIC also recently pressed a fellow regulator to lower the government's confidential ranking of Citi's health - a change that would let regulators control the firm more tightly. Citigroup officials have argued that Bair is overstepping her authority.
Meanwhile, international retailer Guess (GES) said its first quarter profit fell 32 percent from last year, as revenue dropped and margins shrank. However, the company's quarterly earnings per share beat analysts' expectations. The firm's shares are up by 5.5 percent in morning trading.
The major averages have shown a notable move to the upside in recent trading and are currently turning in a mixed performance. While the Nasdaq is down 0.32 at 1,849.70, the Dow is up 46.22 at 8,796.46 and the S&P 500 is up 1.33 at 943.79.
While a majority of the major sector indices are moving lower, most are showing only modest declines, as reflected in the lack of notable movement by the major averages.
Leading the way lower are gold stocks, which are giving back some gains after a considerable run-up at the end of May. Subsequently, the Amex Gold Bugs Index is down by 4.1 percent. The weakness in the sector comes amid a notable decrease by the price of gold.
Biotechnology stocks are also pulling back on the day, as reflected by the 2 percent retreat by the Amex Biotechnology Sector Index. Human Genome Sciences (HGSI) are leading the way lower, falling 13.7 percent and pulling back well off of an eight month high.
Oil, natural gas and semiconductor stocks are also seeing notable weakness on the day. Resource stocks have been hurt by a drop in commodities prices on the NYMEX.
On the other hand, defense and steel stocks are moving higher on the day, with the Amex Defense Index and the Amex Steel Index up by 2.5 percent and 2.4 percent, respectively.
Stocks Driven By Analyst Comments
Denderon (DNDN) is moving higher after being upgraded by Deutsche Bank to a Buy rating. Shares of the biotech firm are up by 3.4 percent, as the firm's Provenge medicine used for the treatment of prostate cancer is expected to be approved by 2010, lifting prospects for the company. With the advance, the stock has added to recent gains, advancing to a fresh historic high.
On the other hand, DuPont (DD) is treading in negative territory as the firm's stock was downgraded to Underperform from Neutral by Bank of America. Shares of the chemical giant are down by 5.6 percent, testing a monthly low.
Shares of Applied Materials (AMAT) are also falling after a downgrade from Citigroup, which changed its rating on the firm to Hold from Buy. Applied Materials is down by 3.5 percent in mid-morning dealing, giving back some recent gain.
In overseas trading, stock markets across the Asia-Pacific region finished notably higher on Friday. Japan's benchmark Nikkei 225 Index rose by 1.0 percent, while Hong Kong's Hang Seng closed up by 1.0 percent.
The major European markets continue to post strong gains. The U.K.'s FTSE 100 Index is up by 1.2 percent, while the French CAC 40 Index and the German DAX Index are up by 1.1 percent and 0.2 percent, respectively.
In the bond market, treasuries continue to show weakness but are well off of their worst levels of the day. Subsequently, the yield on the benchmark ten-year note is up to 3.826 percent, a climb of 11.0 basis points on the day.
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