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U.S. Stocks Continue To Show A Lack Of Direction

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After showing a lack of direction early in the session, stocks continue to turn in a lackluster performance in mid-day trading on Friday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 25.23 points or 0.1 percent at 29,398.08, the Nasdaq is up 21.60 points or 0.2 percent at 9,733.57 and the S&P 500 is up 3.64 points or 0.1 percent at 3,377.58.

Traders have recently shown a predilection toward buying despite signs of mounting headwinds, but the release of a mixed batch of U.S. economic data has finally given them pause.

While the Commerce Department released a report before the start of trading showing U.S. retail sales rose in line with estimates in January, the closely watched core retail sales came in unchanged.

The Commerce Department said retail sales rose by 0.3 percent in January after edging up by a downwardly revised 0.2 percent in December.

Economists had expected retail sales to climb by 0.3 percent, matching the increase originally reported for the previous month.

However, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, were unchanged in January after rising by a downwardly revised 0.2 percent.

Core retail sales were expected to rise by 0.3 percent compared to the 0.5 percent increase originally reported for the previous month.

"After a rare contraction in the fourth quarter, the 3m/3m annualized growth rate of control group sales slipped further to -0.7% in January," said Andrew Hunter, Senior U.S. Economist at Capital Economics,

He added, "That means there are now clear downside risks to our initial forecast that real consumption growth will rebound back above 2% annualized in the first quarter."

The Federal Reserve also released a report showing a continued decrease in U.S. industrial production in the month of January, as unseasonably warm weather led to another steep drop in utilities output.

The Fed said industrial production fell by 0.3 percent in January following a revised decrease of 0.4 percent in December. Economists had expected industrial production to dip by 0.2 percent.

Manufacturing output edged down by 0.1 percent in January after inching up by 0.1 percent in December, as Boeing (BA) significantly slowed production of civilian aircraft amid the grounding of its troubled 737 Max.

Meanwhile, the University of Michigan released a report showing an unexpected increase in U.S. consumer sentiment in the month of February.

Preliminary data showed the consumer sentiment index rose to 100.9 percent in February from the final January reading of 99.8. The uptick surprised economists, who had expected the index to edge down to 99.5.

Sector News

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

Gold stocks have come under pressure over the course of the session, however, with the NYSE Arca Gold Bugs Index sliding by 1.2 percent.

The weakness that has emerged among gold stocks comes despite an increase by the price of the precious metal, as gold for April delivery is climbing $5.40 to $1,584.20 an ounce.

Notable weakness also remains visible visible among networking stocks, with Arista Networks (ANET) posting a steep loss even though the networking company reported better than expected fourth quarter results.

Steel stocks have also moved to the downside on the day, while some strength has emerged among commercial real estate and software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index slid by 0.6 percent, while China's Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index closed just below the unchanged line, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries have moved higher, adding to yesterday's modest gains. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.587 percent.

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