Stocks have moved mostly lower over the course of the trading day on Friday, partly offsetting the gains posted in recent sessions. Selling pressure has remained somewhat subdued, however, limiting the downside for the markets.
The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 82.49 points or 0.6 percent at 12,860.87, the Nasdaq is down 25.61 points or 0.9 percent at 2,940.29 and the S&P 500 is down 9.32 points or 0.7 percent at 1,367.19.
The weakness on Wall Street is partly due to profit taking following the recent gains, which lifted the major average back toward near-term resistance. Lingering concerns about the economic outlook are also weighing on the markets.
Traders are also keeping an eye on the latest developments in Europe, where the eurozone finance ministers gave their final nod of approval for a 100 billion euro bailout deal for troubled Spanish banks. The decision to backstop the Spanish banking sector was unanimous.
In the beginning, 30 billion euros will be set aside for use in case of "urgent unexpected financing needs," the Eurogroup said. The first tranche is likely to be made available by the end of this month.
The markets are also digesting the latest batch of earnings news, including quarterly results from tech giants Microsoft (MSFT) and Google (GOOG).
After the close of trading on Thursday, Microsoft reported fourth quarter adjusted earnings of $0.73 per share, ahead of the $0.62 per share consensus estimate. Revenues, adjusted for deferred revenues, rose 7 percent to $18.60 billion, ahead of the consensus estimate.
Google's second quarter adjusted earnings rose to $10.12 per share from $8.74 per share last year. Revenues, excluding traffic acquisition costs, totaled $8.36 billion, slightly shy of the $8.41 billion expected by analysts.
Diversified conglomerate General Electric (GE) released its second quarter results before the start of trading, reporting earnings that exceeded estimates but on slightly weaker than expected revenues.
Nonetheless, trading activity remains somewhat subdued amid a lack of major U.S. economic data, with some traders looking to get a head start on the weekend after making some early moves.
Steel stocks have moved sharply lower over the course of the trading day, dragging the NYSE Arca Steel Index down by 2.4 percent. Universal Stainless (USAP) is leading the sector lower, plummeting by 16.9 percent after reporting weaker than expected second quarter results.
Considerable weakness has also emerged among airline stocks, as reflected by the 1.9 percent loss being posted by the NYSE Arca Airline Index. The loss extends a recent downward move by the index, which has fallen to its lowest intraday level in a month.
Brokerage and banking stocks are also seeing significant weakness, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index falling by 2 percent and 1.4 percent, respectively.
Railroad, networking, and software stocks have also come under pressure on the day, while notable strength among oil service and housing stocks has helped to limit the downside for the markets.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while China's Shanghai Composite Index ended the day down by 0.7 percent.
The major European markets also showed notable moves to the downside on the day. The U.K.'s FTSE 100 Index fell by 1.1 percent, while the German DAX Index and the French CAC 40 Index plunged 1.9 percent and 2.1 percent, respectively.
In the bond market, treasuries have shown a strong upward move, climbing back toward record highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 1.46 percent.
by RTT Staff Writer
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