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U.S. Stocks Showing A Lack Of Direction, Nike Weighing On Dow

wallstreet aug20 30sep22 lt

Stocks have shown a lack of direction over the course of morning trading on Friday, with the major averages bouncing back and forth across the unchanged line following the wild swings seen over the two previous sessions.

Currently, the major averages are turning in a mixed performance. While the Dow is down 67.29 points or 0.2 percent at 29,158.32, the S&P 500 is up by 2.39 points or 0.1 percent at 3,642.86 and the Nasdaq is up 47.61 points or 0.4 percent at 10,785.11.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following recent volatility.

Stocks showed wild swings over the two previous sessions, rallying strongly during trading on Wednesday before pulling back sharply on Thursday.

Traders are also digesting the latest U.S. economic data, including a Commerce Department report on personal income and spending that includes a reading on inflation said to be preferred by the Federal Reserve.

The report showed the annual rate of core consumer price growth accelerated to 4.9 percent in August from a revised 4.7 percent in July.

Economists had expected the annual rate of growth in core consumer prices, which exclude food and energy prices, to tick up to 4.7 percent from the 4.6 percent originally reported for the previous month.

Meanwhile, the University of Michigan released a separate report showing one-year inflation expectations edged down to 4.7 percent in September from 4.8 percent in August, hitting the lowest level since last September.

Five-year inflation expectations also dipped to 2.7 percent in September from 2.9 percent in August, falling below the 2.9-3.1 percent range for the first time since July 2021.

"Inflation expectations are likely to remain relatively unstable in the months ahead, as consumer uncertainty over these expectations remained high and is unlikely to wane in the face of continued global pressures on inflation," said Hsu.

MNI Indicators also released a report showing an unexpected contraction in Chicago-area business activity in the month of September.

A steep drop by shares of Nike (NKE) is weighing on the Dow, with the athletic footwear and apparel giant plunging by 10.2 percent.

Nike has come under pressure after reporting better than expected fiscal first quarter earnings and revenues but warning it will need to cut prices amid a surge in inventories.

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

Gold stocks are seeing notable strength in morning trading, however, driving the NYSE Arca Gold Bugs Index up by 1.8 percent.

The strength in the gold sector comes amid an increase by the price of the precious metal, with gold for December delivery climbing $11 to $1,679.60 an ounce.

Biotechnology and computer hardware stocks have also moved to the upside, while some weakness is visible among energy and pharmaceutical stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index plunged by 1.8 percent, while China's Shanghai Composite Index slid by 0.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index are up by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries have moved higher following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 3.714 percent.

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