Nasdaq Rebounds, Dow Firmly Negative Amid Volatility On Wall Street

After ending the previous session sharply lower, stocks have seen substantial volatility over the course of the trading day on Friday. 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 Dow is down 236.06 points or 0.8 percent at 31,165.95, the Nasdaq is up 158.24 points or 1.2 percent at 13,277.67 and the S&P 500 is up 10.28 points or 0.3 percent at 3,839.62.

The volatility on Wall Street come as traders remain focused on activity in the bond markets, with yields rebounding after moving lower early in the session.

After falling as low as 1.455 percent, the yield on the benchmark ten-year note has rebounded but currently remains modestly lower.

The yields on ten-year notes and thirty-year bonds have recently jumped to their highest levels in a year, leading to concerns about higher interest rates.

The rebound by yields came following the release of another batch of largely upbeat U.S. economic data, which has reduced the appeal of bands.

Before the start of trading, the Commerce Department released a report showing U.S. personal income skyrocketed in the month of January, reflecting the issuance of $600 stimulus checks.

The Commerce Department said personal income spiked by 10.0 percent in January after rising by 0.6 percent in December. Economists had expected personal income to soar by 9.5 percent.

The report also showed a significant rebound in personal spending, which surged up by 2.4 percent in January after falling by a revised 0.4 percent in December.

Economists had expected personal spending to jump by 2.5 percent compared to the 0.2 percent dip originally reported for the previous month.

Revised data released by the University of Michigan also showed U.S. consumer sentiment deteriorated by slightly less than initially estimated in the month of February.

The report showed the consumer sentiment index for February was upwardly revised to 76.8 from the initial estimate of 76.2.

The revised reading came in above economist estimates of 76.5 but was still below the final January reading of 79.0.

On the inflation front, one-year inflation expected jumped to 3.3 percent in February from 3.0 percent in January. Five-year inflation expectations were unchanged at 2.7 percent.

“While consumers clearly anticipate a spurt in inflation in the year ahead, the overall evidence does not indicate the emergence of an inflationary psychology that makes the expectation of inflation a self-fulfilling prophecy,” said Surveys of Consumers chief economist Richard Curtin.

A steep drop by shares of Salesfore (CRM) is weighing on the day, with the business software company slumping by 4.5 percent after reporting better than expected fourth quarter results but providing a disappointing profit forecast.

Sector News

Despite the wild swings by the broader markets, gold stocks continue to see substantial weakness in mid-day trading, dragging the NYSE Arca Gold Bugs Index down by 4.2 percent to its lowest intraday level in ten months.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for April delivery plunging $55.90 to $1,719.50 an ounce.

Energy stocks have climbed off their worst levels of the day but also continue to see considerable weakness amid a pullback by the price of crude oil.

Crude for April delivery is tumbling $1.28 to $62.25 a barrel after ending the previous session at its highest closing level in over a year.

Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 2.7 percent, the Philadelphia Oil Service Index is down by 2.2 percent and the NYSE Arca Natural Gas Index is down by 1.3 percent.

On the other hand, computer hardware and semiconductor stocks have moved sharply higher over the course of the session, contributing to the rebound by the tech-heavy Nasdaq.

The NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index have surged up by 2.4 percent and 2.3 percent, respectively.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan’s Nikkei 225 Index showed a 4 percent nosedive, while China’s Shanghai Composite Index slumped by 2.1 percent.

The major European markets also showed notable moves to the downside on the day. While the U.K.’s FTSE 100 Index plunged by 2.5 percent, the French CAC 40 Index tumbled by 1.4 percent and the German DAX Index fell by 0.7 percent.

In the bond market, treasuries have given back ground after moving higher early in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 1.506 percent.