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U.S. Stocks Turning In Lackluster Performance In Mid-Day Trading

wallstreet aug23 17jul20 lt

Stocks have shown a lack of direction over the course of the trading session on Friday, with the major averages spending the day bouncing back and forth across the unchanged line after failing to sustain an initial upward move.

Currently, the major averages are turning in a mixed performance. While the Dow is down 12.10 points or 0.1 percent at 26,722.61, the Nasdaq is up 24.90 points or 0.2 percent at 10,498.73 and the S&P 500 is up 8.05 points or 0.3 percent at 3,223.62.

The choppy trading on Wall Street comes as traders generally remain optimistic about the economic outlook but can't ignore the troubling headlines on the coronavirus front.

The U.S. reported a record 77,255 new coronavirus cases on Thursday, according to data compiled by Johns Hopkins University.

Reflecting the widespread resurgence of the coronavirus, the University of Michigan released a report showing an unexpected deterioration in U.S. consumer sentiment in the month of July.

The preliminary report said the consumer sentiment index tumbled to 73.2 in July after jumping to 78.1 in June. The pullback surprised economists, who had expected the index to inch up to 79.0.

With the unexpected decrease, Surveys of Consumers chief economist Richard Curtin noted the index is "insignificantly" above the nearly nine-year low set in April.

"Following the steepest two-month decline on record, it is not surprising that consumers need some time to reassess the likely economic impact from the coronavirus on their personal finances and on the overall economy," Curtin said.

He added, "Unfortunately, declines are more likely in the months ahead as the coronavirus spreads and causes continued economic harm, social disruptions, and permanent scarring."

A steep drop by shares of Netflix (NFLX) is also weighing on the markets, with the video streaming giant plunging by 6.7 percent.

The sell-off by Netflix comes after the company reported second quarter earnings that missed analyst estimates and forecast weaker than expected subscriber growth.

Sector News

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

Gold stocks have shown a substantial move to the upside, however, with the NYSE Arca Gold Bugs Index surging up by 3.1 percent.

The rally by gold stocks comes amid an increase by the price of the precious metal, as gold for August delivery is climbing $11.90 to $1,812.20 an ounce.

Considerable strength has also emerged among networking stocks, driving the NYSE Arca Networking Index up by 2.5 percent to its best intraday level in almost a month.

On the other hand, airline stocks are extending the sharp pullback seen in the previous session, resulting in a 1.3 percent slump by NYSE Arca Airline Index.

Banking stocks have also shown a significant move to the downside on the day, dragging the KBW Bank Index down by 1.4 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, but Japan's Nikkei 225 Index bucked the uptrend and slipped by 0.3 percent. China's Shanghai Composite Index inched up by 0.1 percent, while Australia's S&P/ASX 200 Index rose by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index fell by 0.3 percent, the German DAX Index climbed by 0.4 percent and the U.K.'s FTSE 100 Index advanced by 0.6 percent.

In the bond market, treasuries have shown a notable move to the downside in recent trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2 basis points at 0.632 percent.

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