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U.S. Stocks Give Back Ground After Initial Move To The Upside

wallstreet aug31 20may22 lt

After moving higher early in the session, stocks have given back ground over the course of morning trading on Friday. The major averages have pulled back off their highs of the session, with the Dow dipping into negative territory.

Currently, the Dow is down 7.45 points or less than a tenth of a percent at 31,245.68 after rising more than 260 points. Meanwhile, the Nasdaq is up 43.14 points or 0.4 percent at 11,431.63 and the S&P 500 is up 8.58 points or 0.2 percent at 3,909.37.

Bargain hunting contributed to the initial strength on Wall Street, with some traders looking to pick up stocks at reduced levels.

The drop seen on Thursday dragged the Dow and the S&P 500 to their lowest closing levels in over a year, with the S&P 500 approaching bear market territory.

However, recent rebound attempts have not met with much success amid lingering concerns about the outlook for the global economy.

The worries may have been partly offset by news that China cut its benchmark reference rate for mortgages in an effort to support the economy amid Covid-related lockdowns.

A lack of major U.S. economic data may be keeping some traders on the sidelines following the release of a slew of data earlier this week.

Traders may be looking ahead to next week's reports on new home sales, durable goods orders, and personal income and spending as well as the minutes of the latest Federal Reserve meeting.

Steel stocks are seeing considerable strength following the rate cut by China, with the NYSE Arca Steel Index climbing by 1.4 percent.

Notable strength is also visible among pharmaceutical stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Pharmaceutical Index.

Energy and brokerage stocks have also move to the upside on the day, while computer hardware stocks are seeing significant weakness.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.3 percent, while Hong Kong's Hang Seng Index spiked by 3 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index is surging by 1.7 percent, the German DAX Index is up by 1.4 percent and the French CAC 40 Index is up by 0.8 percent.

In the bond market, treasuries have fluctuated over the course of the morning and are currently seeing modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.2 basis points at 2.833 percent.

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