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U.S. Stocks Continue To Turn In Lackluster Performance

wallstreet oct10 30sep22 lt

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

Currently, the major averages are all in negative territory. The Dow is down 217.02 points or 0.7 percent at 29,008.59, the Nasdaq is down 27.13 points or 0.3 percent at 10,710.38 and the S&P 500 is down 16.43 points or 0.5 percent at 3,624.04.

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 12.0 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.

Sector News

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 substantial strength, however, driving the NYSE Arca Gold Bugs Index up by 2.7 percent.

The strength in the gold sector comes amid a modest increase by the price of the precious metal, with gold for December delivery inching up $2.30 to $1,670.90 an ounce.

Steel, biotechnology and brokerage stocks have also shown strong moves to the downside, while interest rate-sensitive utilities stocks are extending a recent sell-off

Other Markets

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 moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index jumped by 1.2 percent and the French CAC 40 Index surged by 1.5 percent.

In the bond market, treasuries have moved modestly lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 3.762 percent.

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