RTTNews - Stocks remain largely negative in mid-afternoon trading on Friday, as investors react to data indicating continued consumer concern about the economy. The major averages are all in negative territory at the moment, with the slide slowed by another day of limited trading volume.
The day's selling pressure was largely generated by a report released by Reuters and the University of Michigan showing that consumer sentiment in the month of July deteriorated by much more than anticipated, with the decrease likely due in part to concerns about the labor market.
Earlier, traders shrugged off data from the Commerce Department showing a narrower than expected trade deficit for May and a separate report from the Labor Department that revealed a jump in import prices in June.
The major indices have seen choppy trading in the afternoon hours, with the Nasdaq swinging between gains and losses in recent trading. While the Nasdaq is down only 1.33 at 1,751.22, the Dow has fallen by 65.07 to 8,118.10 and the S&P 500 is down 5.64 at 877.04.
A majority of the Dow components are trading in negative territory, helping to keep the blue chip index in the red.
Chevron (CVX) is turning in one of the Dow's worst performances, with the oil giant currently down 2.9 percent after hitting a four-month intraday low earlier in the session.
The loss by Chevron comes after the company announced that its U.S. refining margins for the second quarter fell sharply and that it expects its downstream results for the quarter to be significantly lower compared to the previous reporting period.
Further, Exxon Mobil (XOM) is dipping by 1.4 percent, extending its losses for a fourth straight session. The retreat has dragged the stock down to its lowest intraday level in over two months.
JP Morgan Chase (JPM) is also retreating, falling by 3.5 percent on the day. Despite the notable downward move, shares of the financial giant have remained in a roughly two-month trading range.
While IBM Corp. (IBM), Merck (MRK), and Wal-Mart (WMT) are showing notable moves to the downside, strong gains by American Express (AXP) and 3M (MMM) have helped to limit the downside for the Dow.
Housing stocks continue to retreat, with the Philadelphia Housing Sector Index sliding by 1.9 percent. The sector is being led lower by Radian Group (RDN), which has plunged by 8.9 percent on the day. With the drop, the Radian is poised to finish the session at its worst closing price in over two months.
Notable weakness is also visible among healthcare provider and health insurance stocks, as reflected by a 1.5 percent pullback in the Morgan Stanley Healthcare Provider Index and a 1.3 percent decline in the Morgan Stanley Healthcare Payor Index.
Both the indices have seen choppy trading in recent weeks amid mixed signals from Washington, where lawmakers are debating healthcare reform.
Banking, commercial real estate and oil stocks also continue to show notable weakness, reflecting the day's pullback in a variety of equity segments. The losses by oil stocks come amid a drop in the price of crude oil, which is sliding by $0.49 to $59.92 per barrel.
Meanwhile, some transportation and electronic storage stocks are continuing to defy the day's broad downtrend, with the Dow Jones transportation Average and the NYSE Arca Disk Drive Index posting moderate gains.
In Focus: Economic Data, The New GM
As mentioned above, the Reuters/University of Michigan report showed that the preliminary reading on the consumer sentiment index for July came in at 64.6 compared the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0.
Also on the economic front, the Commerce Department revealed that the U.S. trade deficit narrowed to $26.0 billion in May from $29.2 billion in April. The data surprised economists, who had expected the deficit to widen to $30.0 billion for the month.
A separate report from the Labor Department revealed that import prices rose 3.2 percent in June while export prices rose 1.1 percent. The jump in import prices was largely due to a substantial increase in the prices of petroleum imports.
Meanwhile, General Motors Corp. (GMGMQ.PK) CEO Fritz Henderson announced in a press conference this morning that the new General Motors Company is beginning its operations as a new entity.
The new GM is majority-owned by the U.S. government, which holds a 61 percent stake in the company. The remaining shares will be held by a United Auto Workers union healthcare trust, the governments of Canada and Ontario, and GM's former unsecured bondholders.
In overseas trading, stock markets across the Asia-Pacific region ended Friday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by less than a tenth of a percent, while Hong Kong's Hang Seng Index slipped by 0.5 percent on the day.
The major European markets also finished on the downside, with the German DAX Index and the French CAC 40 Index closing down by 1.2 percent and 1.4 percent, respectively. The U.K.'s FTSE 100 Index also fell, posting a loss of 0.8 percent for the session.
In the bond markets, treasuries are extending their strong gains amid the pullback on Wall Street. Subsequently, the benchmark ten-year note is trading at 3.299 percent, a loss of 11.4 basis points on the day.
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