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U.S. Stocks Move Mostly Lower After Seeing Initial Strength

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Following the modest strength seen in the previous session, stocks moved mostly lower over the course of the trading day on Friday. The major averages failed to sustain an initial upward move and slid firmly into negative territory as the day progressed.

The major averages showed a notable move to the downside in late-day trading, hitting new lows for the session. The Dow fell 68.77 points or 0.3 percent to 27,154.20, the Nasdaq slid 60.75 points or 0.7 percent to 8,146.49 and the S&P 500 dropped 18.50 points or 0.6 percent to 2,976.61.

With the downturn on the day, the major averages also moved lower for the week. The Dow slumped by 0.7 percent, while the Nasdaq and the S&P 500 both tumbled by 1.2 percent.

The initial strength in Wall Street partly reflected a positive reaction to upbeat earnings news from Microsoft (MSFT), as the software giant reported fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Buying interest waned shortly after the start of trading, however, as traders looked ahead to the slew of earnings news due to be released next week.

Coca-Cola (KO), Travelers (TRV), Visa (V), AT&T (T), Boeing (BA), Caterpillar (CAT), UPS (UPS), Facebook (FB), Ford (F), 3M (MMM), Alphabet (GOOGL), Intel (INTC), McDonald's (MCD), and Twitter (TWTR) are among the companies due to report their quarterly results.

Traders were also digesting the New York Federal Reserve's efforts to walk back comments President John Williams made Thursday that seemed to endorse a near-term interest rate cut.

Williams said it "pays to act quickly to lower rates at the first sign of economic distress," arguing it is "better to take preventative measures than to wait for disaster to unfold."

However, a New York Fed spokesman later claimed Williams' remarks were based on years of research and not specifically about potential policy actions at the upcoming Fed meeting.

On the U.S. economic front, the University of Michigan released a report on Friday showing a slight improvement in U.S. consumer sentiment in the month of July.

The preliminary report showed the consumer sentiment index inched up to 98.4 in July from the final June reading of 98.2. Economists had expected the index to edge up to 98.5.

"Consumer sentiment remained largely unchanged in early July from June, remaining at quite favorable levels since the start of 2017," said Surveys of Consumers chief economist Richard Curtin.

Sector News

Biotechnology stocks showed a significant move to the downside over the course of the session, dragging the NYSE Arca Biotechnology Index down by 1.9 percent.

Considerable weakness also emerged among gold stocks, which pulled back following the rally seen in the previous session.

The NYSE Arca Gold Bugs Index tumbled by 1.6 percent after spiking by 3.2 percent to a nearly two-year closing high on Thursday.

The pullback by gold stocks came as the price of gold for August delivery dipped $1 to $1,425.10 an ounce after surging to a six-year high of $1,454.40 an ounce earlier in the session.

Interest rate-sensitive commercial real estate and utilities stocks also moved to the downside on the day, while notable strength was visible among steel stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved significantly higher during trading on Friday. Japan's Nikkei 225 Index soared by 2 percent, while Hong Kong's Hang Seng Index jump by 1.1 percent.

The major European markets showed more modest moves to the upside on the day. While the French CAC 40 Index closed just above the unchanged line, the U.K.'s FTSE 100 Index edged up by 0.2 percent and the German DAX Index rose by 0.3 percent.

In the bond market, treasuries showed a lack of direction for most of the session before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 2.048 percent.

Looking Ahead

Earnings news is likely to be in the spotlight next week, although traders are also likely to keep an eye on reports on new and existing home sales, durable goods orders and second quarter GDP.

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