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Major Averages Turning In Mixed Performance In Morning Trading - U.S. Commentary


After trending lower in recent sessions, stocks are turning in a mixed performance in morning trading on Friday. While the tech-heavy Nasdaq is rebounding following a recent pullback, the Dow has shown a modest move to the downside.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is up 20.50 points or 0.3 percent at 7,943.23, but the Dow is down 50.25 points or 0.2 percent at 25,945.62 and the S&P 500 is down 1.74 points or 0.1 percent at 2,876.31.

The mixed performance on Wall Street comes following the release of a closely watched Labor Department report showing stronger than expected job growth in the month of August.

The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

The report also said the annual rate of average hourly employee earnings growth accelerated to 2.9 percent in August from 2.7 percent in July.

The data paints a positive picture of the economy but has also reinforced expectations the Federal Reserve will raise interest rates later this month.

"This report is strong throughout and with the economy likely to grow more than 3% again in 3Q18 it will keep the Fed hiking interest rates with another move in September with a further increase in December," said James Knightley, Chief International Economist at ING.

Traders are also expressing some uncertainty about trade following the expiration of a public comment period on new U.S. tariffs on $200 billion worth of Chinese goods.

President Donald Trump's chief economic adviser Larry Kudlow told Bloomberg the administration is reviewing the comments but declined to say when a decision on the tariffs will be announced.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Utilities stocks are seeing some weakness amid concerns about higher interest rates, while networking and semiconductor stocks are rebounding following recent weakness.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index closed just below the unchanged line.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index is just above the unchanged line, the German DAX Index is down by 0.1 percent and the U.K.'s FTSE 100 Index is down by 0.7 percent.

In the bond market, treasuries have moved notably lower following the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.8 basis points at 2.937 percent.

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