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Stocks Continue To Turn In Lackluster Performance - U.S. Commentary

After showing a strong upward move over the course of the previous session, stocks have shown a lack of direction throughout the trading day on Friday. The choppy trading comes as traders seem reluctant to make any significant move's following yesterday's rally.

The major averages currently continue to turn in a mixed performance, with the tech-heavy Nasdaq down 12.22 points or 0.4 percent at 2,947.63, while the Dow is up 19.91 points or 0.2 percent at 12,923.99 and the S&P 500 is up 0.30 points or less than a tenth of a percent at 1,358.34.

The lackluster performance on Wall Street comes as traders are taking a breather following the rally that was seen in the previous session. Nonetheless, optimism about the financial situation in Greece has kept traders from doing much profit taking.

The markets have largely shrugged off the release of a report from the Labor Department showing a modest increase in consumer prices in the month of January.

The Labor Department said its consumer price index rose by 0.2 percent in January after coming in unchanged in the previous month. Economists had expected the index to increase by 0.3 percent.

Excluding food and energy prices, the core consumer price index also rose by 0.2 percent in January after edging up by 0.1 percent in December. The increase by the core index came in line with economist estimates.

A separate report from the Conference Board showed that its index of leading economic indicators increased for the fourth consecutive month in January.

The Conference Board said its leading economic index rose by 0.4 percent in January following a revised 0.5 percent increase in December. Economists had been expecting the index to increase by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.

Ataman Ozyildirim, an economist at the Conference Board, said, "This fourth consecutive gain in the LEI reflected fairly widespread strength among its components, pointing to somewhat more positive economic conditions in early 2012."

Among individual stocks, food maker H.J. Heinz (HNZ) is up by 5 percent after reporting stronger than expected third quarter earnings and narrowing its full year earnings outlook.

Applied Materials (AMAT) is posting a more modest gain after the semiconductor equipment maker reported better than expected first quarter results. The company's second quarter guidance was also above consensus estimates.

Meanwhile, shares of Nordstrom (JWN) are down by 2.3 percent after the upscale department store operator reported better than expected fourth quarter earnings but forecast full year 2012 earnings below analyst estimates.

Sector News

While most of the major sectors are showing only modest moves, considerable weakness is visible among biotechnology stocks. Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index is down by 1.7 percent.

Gilead Sciences (GILD) is leading the biotech sector lower, tumbling by 15 percent after the biopharmaceutical company said a majority of patients using its hepatitis C treatment experienced a relapse within four weeks of completing the treatment.

Notable weakness has also emerged in the gold sector, with the NYSE Arca Gold Bugs Index down by 1.3 percent. The weakness among gold stocks comes amid a decrease by the price of the precious metal.

On the other hand, oil service stocks continue to see significant strength amid an increase by the price of crude oil. With crude for April delivery climbing $0.58 to $103.22 a barrel, the Philadelphia Oil Service Index is up by 1 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved higher on Friday, benefiting from the strength seen on Wall Street overnight. Japan's Nikkei 225 Index jumped 1.6 percent, while Hong Kong's Hang Seng Index rose by 1 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index ended the day up by 0.3 percent, the French CAC 40 Index and the German DAX Index both surged up by 1.4 percent.

In the bond market, treasuries have climbed off their worst levels but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.1 basis points at 2.024 percent after reaching a high of 2.038 percent.

by RTTNews Staff Writer

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