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U.S. Stocks Showing A Lack Of Direction In Morning Trading

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Despite a batch of seemingly positive catalysts, stocks have shown a lack of direction over the course of morning trading on Friday. The major averages have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 6.39 points or 0.1 percent at 8,188.08, the Dow is up 40.06 points or 0.2 percent at 27,222.51 and the S&P 500 is up 2.51 points or 0.1 percent at 3,012.08.

The choppy trading on Wall Street comes as the major averages have encountered some resistance as they climb back within striking distance of the record highs set in July.

Signs of easing trade tensions between the U.S. and China and upbeat economic data have generated some positive sentiment, but traders seem wary of pushing stocks to new highs amid lingering uncertainty.

On the trade front, China's Ministry of Commerce revealed plans to exempt U.S. agricultural products, including soybeans and pork, from additional tariffs.

China will add the agricultural products to a list of 16 types of American-made products granted tariff exemptions as a sign of goodwill ahead of the next round of trade talks.

The Commerce Ministry also said it welcomes President Donald Trump's move to temporarily delay raising the rate of tariffs on $250 billion worth of Chinese imports.

Meanwhile, Trump said he would think about an interim deal with China but would prefer a full agreement as the world's two largest economies look to end the widening trade war.

"If we're going to do the deal, let's get it done," Trump told reporters on Thursday. "A lot of people are talking about it, I see a lot of analysts are saying an interim deal — meaning we'll do pieces of it, the easy ones first."

"But there's no easy or hard. There's a deal or there's not a deal," he added. "But it's something we would consider, I guess."

In U.S. economic news, the Commerce Department released a report showing U.S. retail sales increased by more than expected in August amid a jump in auto sales.

The Commerce Department said retail sales rose by 0.4 percent in August after climbing by an upwardly revised 0.8 percent in July.

Economists had expected retail sales to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

The stronger than expected retail sales growth came as sales by motor vehicle and parts dealers spiked by 1.8 percent in August after inching up by 0.1 percent in July.

However, Andrew Hunter, Senior U.S. Economist at Capital Economics, called the jump in auto sales "suspicious looking," noting the surge in the nominal value of motor vehicle sales is "hard to square" with the 0.7 percent increase in the unit sales reported by manufacturers.

Excluding the jump in auto sales, retail sales came in unchanged in August after surging up by 1.0 percent in July. Ex-auto sales had been expected to inch up by 0.1 percent.

A separate report from the University of Michigan showed U.S. consumer sentiment has rebounded by more than expected in the month of September.

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

Optimism about a U.S.-China trade deal has contributed to notable strength among steel stocks, however, with the NYSE Arca Steel Index climbing by 1.3 percent.

Banking and transportation stocks are also seeing some strength on the day, while gold and tobacco stocks have moved to the downside.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although major markets in China and South Korea were closed for holidays. Japan's Nikkei 225 Index surged up by 1.1 percent and Hong Kong's Hang Seng Index jumped by 1 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has risen by 0.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.2 percent.

In the bond market, treasuries are extending the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.3 basis points at 1.864 percent.

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