U.S. Stocks Regain Ground After Early Weakness, Dow Turns Positive

After coming under pressure early in the session, stocks have regained ground over the course of the trading day on Friday. The major averages have bounced well off their worst levels of the day, with the Dow climbing into positive territory.

Currently, the major averages are turning in a mixed performance. While the Dow is up 63.68 points or 0.2 percent at 42,088.87, the Nasdaq is down 52.06 points or 0.3 percent at 17,961.93 and the S&P 500 is down 10.29 points or 0.2 percent at 5,703.35.

The early weakness on Wall Street partly reflected profit taking, with some traders cashing on yesterday’s strong gains.

The Dow and the S&P 500 surged to new record closing highs on Thursday amid a positive reaction to the Federal Reserve’s decision to slash interest rates by half a percentage point.

Selling pressure has waned over the course of the session, however, as traders seem reluctant to make more significant moves as they question what will be the next catalyst for the markets now that the Fed’s first rate cut is in the rearview mirror.

A lack of major U.S. economic data may also be keeping some traders on the sidelines ahead of the release of several key reports next week.

While the Fed has already signaled plans to continue lowering rates in the coming months, the data could still impact market sentiment.

Reports on durable goods orders, new home sales and consumer confidence are likely to attract attention next week along with a report on personal income and spending that includes the Fed’s preferred inflation gauge.

Sector News

Transportation stocks continue to see substantial weakness on the day, dragging the Dow Jones Transportation Average down by 3.0 percent. The index ended the previous session at its best closing level in over a year.

A steep drop by shares of FedEx (FDX) is weighing on the sector, with the delivery giant plunging by 13.7 percent are reporting disappointing fiscal first quarter earnings and lowering its full-year guidance.

Significant weakness also remains visible among semiconductor stocks, resulting in a 1.9 percent slump by the Philadelphia Semiconductor Index.

Steel and housing stocks are also seeing notable weakness on the day, while gold and networking stocks have shown strong moves to the upside.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index shot up by 1.5 percent, while Hong Kong’s Hang Seng Index leapt by 1.4 percent.

Meanwhile, the major European markets showed notable moves to the downside on the day. While the U.K.’s FTSE 100 Index slumped by 1.2 percent, the French CAC 40 Index and the German DAX Index both tumbled by 1.5 percent.

In the bond market, treasuries have moved modestly higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 3.722 percent.

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