RTTNews - Stocks are seeing continued weakness in early afternoon trading on Friday, as traders do some profit taking despite the release of some encouraging economic data. While stocks have moved mostly lower, trading activity has remained somewhat subdued.
Trading on the New York Stock Exchange has been bogged down by a breakdown in three servers, halting trading in 240 stocks. Trading in several companies, including Bank Of America (BAC), General Electric (GE), Exxon Mobil (XOM) and Merck (MRK), were affected by the glitch.
The week's trading has been marred by weak volume, which has contributed to the tame moves in the equity markets. Volatility has been dampened as some traders have moved to the sidelines ahead of the lull of the summer season.
On the economic front, 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.
Some traders also looked to comments from President Barack Obama's chief economic advisor Larry Summers, who remarked on the current state of the economy and indicated how the government plans to remove its holdings from a number of firms.
The major averages continue to tread in negative territory in the early afternoon, although they have remained in a range in recent trading. The Dow is currently down 11.87 at 8,759.05, the Nasdaq is down 22.77 at 1,839.60 and the S&P 500 is down 4.90 at 939.99.
Most of the major sectors continue to show weakness in afternoon trading, helping to hold the major averages in negative territory.
Semiconductor stocks are seeing notable weakness, as reflected by the 3 percent retreat being shown by the Philadelphia Semiconductor Index.
National Semiconductor (NSM) is helping to lead the way lower after the chipmaker swung to a fourth quarter loss, hurt by lower sales as well as severance and restructuring costs. The stock has slipped by 7.4 percent, pulling back further off the eight-month closing high set on Wednesday.
Considerable losses have also continued among resource stocks, with steel, oil service and gold stocks seeing significant declines. The move comes as traders continue to do some profit taking in commodities after the recent rally.
Despite the drop in oil prices, trucking stocks are also suffering on the day, with the Dow Jones Trucking Index falling by 3.3 percent.
On the other hand, pharmaceutical and railroad stocks are seeing some strength, with the NYSE Arca Pharmaceutical Index and the Dow Jones Railroads Index rising by 1.9 percent and 1.2 percent, respectively.
Stocks In The News
Despite the weakness in the broader markets, Rambus Inc. (RMBS) is surging in afternoon trading after the firm announced that it has reached a tentative settlement in an antitrust case with the European Commission, resulting in no liability and no fines for the company. The firm's stock is up by 14.2 percent, reaching its best intra-day level in five months earlier in the session.
CB Richard Ellis Group Inc. (CBG) is also on the rise after the company completed the sale of Class A common stock under its at-the-market offering program. The company sold 5.7 million shares in open market trading and direct placements under this program for gross proceeds of approximately $50 million. Shares of the commercial real estate services firm are up by 3.1 percent, moving to the upper end of a recent trading range.
Meanwhile, Altera Corp. (ALTR) is sliding after the resignation of Timothy Morse as senior vice president and chief financial officer. Morse left the firm to join Yahoo (YHOO). where he was appointed as chief financial officer. Shares of Altera are down by 4.3 percent, while shares of Yahoo are up by 1.1 percent.
In Focus: Economic Data, Corporate News, Iranian Elections
A Reuters/University of Michigan survey released earlier showed a 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.
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.
In other news, voters in Iran displayed great interest in the country's presidential election Friday, with an unprecedented turnout being reported from polling stations.
In Tehran, long lines of voters formed even before the polling stations were opened. Iran's youth, making up a significant part of the 46.2 million-strong electorate, is expected to play a major role in determining who will head the Islamic nation.
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 closed on the downside. The German DAX Index finished down by 0.7 percent and the French CAC 40 Index fell by 0.3 percent. The U.K.'s FTSE 100 Index also declined, finishing lower by 0.5 percent.
In the bond markets, treasuries are continuing to see notable strength, prompted by the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.77 percent, a drop of 8.6 basis points on the day.
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