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Modest Weakness Remains Visible On Wall Street

wallstreet oct10 22may20 lt

Selling pressure has remained relatively subdued, but stocks continue to see modest weakness in mid-day trading on Friday. With the drop on the day, the major averages are extending the pullback seen in the previous session.

The major averages currently remain stuck below the unchanged line. The Dow is down 150.31 points or 0.6 percent at 24,323.81, the Nasdaq is down 13.29 points or 0.1 percent at 9,271.60 and the S&P 500 is down 9.98 points or 0.3 percent at 2,938.53.

The modest weakness on Wall Street may partly reflect concerns about rising tensions between the U.S. and China, as Beijing moved to strengthen control over Hong Kong with new security laws.

U.S. President Donald Trump warned that Washington would react "very strongly" if China follows through on its plans.

The latest developments come after the Senate passed a bill on Wednesday that would potentially delist Chinese stocks from U.S. exchanges.

Trading activity remains relatively light, however, as traders seem reluctant to make more significant moves as they digest the volatility seen over the past few sessions.

Stocks have see-sawed in recent days following the substantial rally on Monday, although the major averages are currently still poised to close higher for the week.

The upcoming Memorial Day holiday may also be contributing to the light trading, with some traders looking to get a head start on the long weekend.

Sector News

Oil service stocks continue to see substantial weakness in mid-day trading, with the Philadelphia Oil Service Index plunging by 2.7 percent.

The sell-off by oil service stocks comes amid a sharp pullback by the price of crude oil, with crude for July delivery tumbling $1.09 to $32.83 a barrel.

Considerable weakness also remains visible among computer hardware stocks, as reflected by the 2.4 percent slump by the NYSE Arca Computer Hardware Index.

Hewlett Packard Enterprise (HPE) is posting a steep loss after the computing giant reported fiscal second quarter results that missed analyst estimates on both the top and bottom lines.

Banking and steel stocks also continue to see significant weakness on the day, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan's Nikkei 225 Index slumped by 0.8 percent, while Hong Kong's Hang Seng Index plunged by 5.6 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index closed just below the unchanged line and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries are seeing modest strength after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 0.661 percent.

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