With worries about the fiscal cliff once again overshadowing upbeat economic data, stocks are seeing modest weakness in mid-day trading on Friday. A notable drop by shares of Apple (AAPL) is also weighing on the markets.
The major averages have moved to the upside in recent trading but currently remain in the red. The Dow is down 10.90 points or 0.1 percent at 13,159.82, the Nasdaq is down 11.77 points or 0.4 percent at 2,980.39 and the S&P 500 is down 3.19 points or 0.2 percent at 1,416.26.
The modest weakness on Wall Street comes as lawmakers in Washington continue to struggle to reach an agreement to avoid the looming fiscal cliff.
While President Barack Obama and House Speaker John Boehner met at the White House yesterday evening, it is unclear if the two men were able to make any progress on narrowing the gap between their opposing budget proposals.
A joint statement described the 50-minute meeting as "frank" and said "the lines of communication remain open."
As a result of the focus on Washington, traders have shrugged off the latest batch of economic data, including a report from the Federal Reserve showing a notable rebound in U.S. industrial production.
The report said industrial production surged up by 1.1 percent in November after falling by a downwardly revised 0.7 percent in October. Economists had expected production to increase by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.
The Federal Reserve said the rebound in production reflected a recovery in production for industries that were negatively affected by Hurricane Sandy.
Meanwhile, the Labor Department released a separate report showing a bigger than expected drop in U.S. consumer prices in the month of November.
As mentioned above, Apple is posting a notable loss on the day, helping to keep the tech-heavy Nasdaq firmly in the red. The iPad and iPhone maker is down by 3.4 percent, poised to end the day at a nearly ten-month closing low
Health insurance stocks are seeing considerable weakness in mid-day trading, with the Morgan Stanley Healthcare Payor Index down by 2 percent. With the loss, the index is pulling back further off the seven-month closing high it set on Wednesday.
Centene (CNC) has helped to lead the health insurance sector lower, tumbling by 7.9 percent after slashing its full-year guidance.
Significant weakness has also emerged among oil service stocks, as reflected by the 6 percent drop by the Philadelphia Oil Service Index. Schlumberger (SLB) is posting a steep loss after warning that weaker than expected drilling activity will impact its fourth quarter results.
While electronic storage stocks have also come under pressure, steel stocks have moved sharply higher on the day on the heels of upbeat Chinese manufacturing data. The NYSE Arca Steel Index has surged up by 2.4 percent to its best intraday level in almost three months.
Networking stocks are also seeing notable strength on the day, driving the NYSE Arca Networking Index up by 1.9 percent. Alcatel-Lucent (ALU) is posting a standout gain after securing a $2.1 billion financing package.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. While Japan's Nikkei 225 Index edged down by 0.1 percent, Hong Kong's Hang Seng Index advanced by 0.7 percent.
The major European markets also turned mixed on the day. The U.K.'s FTSE 100 Index dipped 0.1 percent, while the French CAC 40 Index closed nearly flat and the German DAX Index rose 0.2 percent
In the bond market, treasuries are regaining some ground following recent weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 1.702 percent after ending the previous session at a one-month closing high.
by RTT Staff Writer
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