Stocks have shown a notable turnaround over the course of the trading day on Friday, recovering from early weakness. The major averages have all climbed into positive territory after ending the previous session mixed.
The major averages have pulled back off their highs for the session but are currently clinging to modest gains. The Dow is up 9.50 points or 0.1 percent at 12,470.46, the Nasdaq is up 7.84 points or 0.3 percent at 2,838.86 and the S&P 500 is up 0.49 points or less than a tenth of a percent at 1,315.48.
The early weakness on Wall Street was partly due to waning optimism about the possibility of further stimulus from the Federal Reserve following Fed Chairman Ben Bernanke's testimony before the Joint Economic Committee on Thursday.
While Bernanke said that Fed "remains prepared to take action" if the economic situation worsens, he made no explicit reference to further easing measures.
Disappointing trade data from Germany also contributed to the initial downward move, with a report from the Federal Statistical Office showing a 4.8 percent drop in imports in April.
Selling pressure remained relatively subdued, however, with investors seemingly reluctant to continue selling stocks following the sharp drop seen over the past month.
Traders subsequently used the early weakness as an opportunity to pick up stocks at reduced levels, contributing to the turnaround by the broader markets.
Nonetheless, lingering concerns about the financial situation in Europe and the outlook for the global economy have helped to keep a lid on the gains.
In U.S. economic news, the Commerce Department released a report showing that the U.S. trade deficit narrowed to $50.1 billion in April from a revised $52.6 billion in March. Economists had expected the deficit to narrow to $49.3 billion from the $51.8 billion originally reported for the previous month.
The narrower trade deficit for the month came as the value of U.S. imports fell at a faster rate than the value of U.S. exports
A separate report from the Commerce Department showed a slightly bigger than expected increase in wholesale inventories in April along with a notable increase in wholesale sales.
Sector News
Health insurance stocks have seen a substantial rebound after falling sharply in the previous session, with the Morgan Stanley Healthcare Payor Index jumping 4.8 percent and tumbling 5.9 percent on Thursday.
Molina Healthcare (MOH) is posting a particularly strong gain, surging up by 26.5 percent after plunging 31 percent on Thursday after withdrawing its full year guidance.
Significant strength has also emerged among healthcare provider stocks, as reflected by the 1.5 percent gain being posted by the Morgan Stanley Healthcare Provider Index. Health Management Associates (HMA) and MedCath (MDTH) are turning in two of the sector's best performances.
While electronic storage, telecom, and retail stocks have also shown notable moves to the upside, considerable weakness remains visible among steel stocks. Reflecting the weakness in the steel sector, the NYSE Arca Steel Index is down by 2.4 percent.
Oil service stocks also remain under pressure, moving lower along with the price of crude oil. With crude for July delivery tumbling $1.92 to $82.90 a barrel, the Philadelphia Oil Service Index is down by 1.5 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved back to the downside on Friday after closing higher in the three previous sessions. Japan's Nikkei 225 Index tumbled by 2.1 percent, while Hong Kong's Hang Seng Index dropped by 0.9 percent.
The major European markets also ended the day in the red but well off their worst levels of the session. While the French CAC 40 Index fell by 0.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index both edged down by 0.2 percent.
In the bond market, treasuries are regaining some ground after pulling back sharply in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.3 basis points at 1.601 percent.
by RTT Staff Writer
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