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

With traders reluctant to make any significant moves, stocks have shown a lack of direction over the course of the trading day on Friday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains, with the Dow up 4.39 points or less than a tenth of a percent at 13,257.15, while the Nasdaq is up 2.57 points or 0.1 percent at 3,058.94 and the S&P 500 is up 2.36 points or 0.2 percent at 1,404.96.

The choppy trading on Wall Street comes as traders seem to be staying on the sidelines following the recent rally, which drove the major averages to multi-year closing highs on Thursday.

While stocks have not followed-through on the recent upward move, it is worth noting that traders are not cashing on the recent gains amid concerns about missing out on any further upside.

On the economic front, the Labor Department released a report showing a moderate increase in consumer prices in the month of February, with the increase reflecting a jump in energy prices.

The Labor Department said its consumer price index rose by 0.4 percent in February following a 0.2 percent increase in January. Economists had expected the index to increase by about 0.5 percent.

Excluding food and energy prices, the core consumer price index edged up by 0.1 percent in February compared to a 0.2 percent increase in the previous month. Core prices had been expected to increase by about 0.2 percent.

Separately, the Federal Reserve released a report showing that industrial production unexpectedly came in unchanged in the month of February, with a sharp drop in mining output offsetting continued growth in the manufacturing sector.

The report showed that industrial production was unchanged in February after rising by a revised 0.4 percent in January. Economist had expected production to increase by 0.5 percent after initial data showed that production was unchanged in the previous month.

Reuters and the University of Michigan also released their preliminary report on consumer sentiment in the month of March, showing an unexpected deterioration

The consumer sentiment index fell to 74.3 in March from 75.3 in February, surprising economists, who had expected the index to increase to 76.0.

Sector News

While most of the major sectors are showing only modest moves, significant weakness has emerged among airline stocks. Reflecting the weakness in the airline sector, the NYSE Arca Airline Index has tumbled by 1.9 percent.

US Airways (LCC) and JetBlue (JBLU) are turning in two of the airline sector's worst performances, falling by 4.5 percent and 3.4 percent, respectively.

Considerable weakness is also visible among housing stocks, as reflected by the 1.1 percent loss being posted by the Philadelphia Housing Sector Index. The loss by the index comes after it ended the previous session at a three-year closing high.

Meanwhile, oil service stocks have shown a strong move to the upside, driving the Philadelphia Oil Service Index up by 2.3 percent. The strength in the sector comes as crude for April delivery is climbing $0.44 to $105.55 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another lackluster performance on Friday, ending the day mixed. While Japan's Nikkei 225 Index edged up by 0.1 percent, Hong Kong's Hang Seng Index slipped 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. The German DAX Index has edged up by 0.2 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.4 percent.

In the bond market, treasuries have climbed off their worst levels of the day but are seeing continued weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up 3.5 basis points or 2.316 percent.

by RTT Staff Writer

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