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U.S. Stocks Remain Little Changed In Afternoon Trading

wallstreet aug30 09dec22 lt

Stocks showed a lack of direction early in the session on Thursday and continue to turn in a lackluster performance in afternoon trading. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 9.37 points or 0.1 percent at 11,091.37, the S&P 500 is down 1.88 points or 0.1 percent at 3,961.63 and the Dow is down 66.50 points or 0.2 percent at 33,714.98.

The lackluster performance on Wall Street comes as traders seem reluctant to make significant moves ahead of next week's Federal Reserve meeting.

While the Fed is widely expected to slow the pace of interest rate hikes to 50 basis points, traders have recently expressed concerns about how much further the Fed will need to raise rates in order to contain inflation.

Traders are likely to pay close attention to the Fed's accompanying statement, although a lot of key data will be released before the next meeting in late January/early February.

Adding to concerns about the outlook for interest rates, the Labor Department released a report showing U.S producer prices increased by more than expected in the month of November.

The Labor Department said its producer price index for final demand rose by 0.3 percent in November, matching upwardly revised increases in October and September.

Economists had expected producer prices to inch up by 0.1 percent compared to the 0.2 percent uptick originally reported for the previous month.

However, the negative sentiment was largely offset by a report from the University of Michigan showing a decrease in consumers' inflation expectations.

The report showed one-year inflation expectations fell to a fifteen-month low of 4.6 percent in December from 4.9 percent in November, although five-year inflation expectations held at 3.0 percent.

"Declines in short-run inflation expectations were visible across the distribution of age, income, education, as well as political party identification," said Surveys of Consumers Director Joanne Hsu.

Sector News

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

Energy stocks have shown a significant move to the downside, however, with a continued decrease by the price of crude oil weighing on the sector.

With crude for January delivery slumping $1.04 to $70.42 a barrel, the Philadelphia Oil Service Index is down by 2.6 percent and the NYSE Arca Oil Index is down by 1.6 percent.

Biotechnology and networking stocks are also seeing some weakness on the day, while gold stocks have moved higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Hong Kong's Hang Seng Index surged by 2.3 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index climbed by 0.5 percent and the German DAX Index advanced by 0.7 percent.

In the bond market, treasuries are extending the notable pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.1 basis points at 3.562 percent.

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