Major Averages Turning In Mixed Performance Amid Choppy Trading

wallstreet oct10 18nov22 lt

After failing to sustain an initial move to the upside, stocks have shown a lack of direction over the course of the trading session on Friday. The choppy trading reflects an extension of the volatility seen over the past several days.

Currently, the major averages continue to turn in a mixed performance. While the Nasdaq is down 49.11 points or 0.4 percent at 11,095.85, the Dow is up 95.85 points or 0.3 percent at 33,642.17 and the S&P 500 is up 2.63 points or 0.1 percent at 3,949.19.

The initial strength on Wall Street partly reflected a positive reaction to upbeat earnings news from some big-name companies.

Apparel retailer Gap (GPS) has moved sharply higher after unexpectedly returning to profitability in the third quarter on sales that exceeded analyst estimates.

Shares of Foot Locker (FL) have also spiked after the athletic footwear and apparel retailer reported better than expected third quarter results and raised its full-year guidance.

Discount retailer Ross Stores (ROST) and cybersecurity company Palo Alto Networks (PANW) are also posting standout gains after reporting quarterly results that beat expectations.

Buying interest waned shortly after the start of trading, however, with some disappointing U.S. economic data weighing on the markets.

The National Association of Realtors released a report showing a substantial decrease in existing home sales in the month of October.

NAR said existing home sales plummeted by 5.9 percent to an annual rate of 4.43 million in October after slumping by 1.5 percent to a rate of 4.71 million in September.

Existing home sales decreased for the ninth consecutive month, resulting in a 28.4 percent nosedive compared to the same month a year ago.

A separate report released by the Conference Board showed a much bigger than expected decrease by its reading on leading U.S. economic indicators in the month of October.

The Conference Board said its leading economic slumped by 0.8 percent in October after falling by a revised 0.5 percent in September. Economists had expected the index to decrease by 0.4 percent, matching the drop originally reported for the previous month.

Noting the index fell for the eight straight month, Ataman Ozyildirim, Senior Director, Economics, at The Conference Board, said the data suggests the economy is "possibly in a recession."

Sector News

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

Networking stocks have moved sharply higher, however, with the NYSE Arca Networking Index surging by 2.1 percent.

Significant strength is also visible among utilities stocks, as reflected by the 1.8 percent jump by the Dow Jones Utility Average.

On the other hand, energy stocks have shown a notable move to the downside amid a steep drop by the price of crude oil.

With crude for December delivery tumbling $2.76 to $78.88 a barrel, the NYSE Arca Oil Index is down by 1.8 percent and the Philadelphia Oil Service Index is down by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index edged down by 0.1 percent, while South Korea's Kospi inched up by 0.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index shot up by 1.2 percent, the French CAC 40 Index jumped by 1.0 percent and the U.K.'s FTSE 100 Index rose by 0.5 percent.

In the bond market, treasuries have come under pressure over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 3.808 percent.

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Business News

Editors Pick
Precision care innovator GE HealthCare Technologies, Inc., recently spun-off from General Electric Co., reported on Monday that profit for the fourth quarter declined from last year, reflecting higher interest and other financial charges. The company also initiated adjusted earnings guidance for the full-year 2023. Japanese auto major Toyota Motor Corp. has retained its title as the world's top selling automaker in fiscal 2022 for the third straight year, by selling around 10.5 million vehicles. The global sales were nearly flat with last year amid solid demand centered around Asia, while global production grew with increased capacity and production optimization in North America and Asia. Dutch consumer electronics giant Philips Electronics NV reported Monday a loss in its fourth quarter, compared to prior year's profit, even as sales increased. The company further declared a dividend, and said its order book remains strong. Going ahead, the company projects comparable sales growth in fiscal 2023, 2025, and beyond.
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