U.S. Stocks Little Changed After Early Move To The Upside

After moving to the upside early in the session, stocks have turned in a relatively lackluster performance over the course of the trading day on Friday. The major averages have pulled back off their highs of the session and are now lingering near the unchanged line.

Currently, the major averages are narrowly mixed. While the Dow is up 27.74 points or 0.1 percent at 43,941.86, the Nasdaq is down 28.21 points or 0.1 percent at 19,874.63 and the S&P 500 is down 0.75 points or less than a tenth of a percent at 6,050.50.

The early strength on Wall Street partly reflected a positive reaction to earnings news from Broadcom (AVGO), with the chipmaker soaring by 19.6 percent.

The spike by Broadcom comes after the company reported better than expected fiscal fourth quarter earnings and said it expects continued strong demand for its custom AI chips.

Buying interest waned shortly after the start of trading, however, as traders look ahead to next week’s Federal Reserve meeting.

The Fed is widely expected to lower interest rates by another 25 basis points, although traders are likely to pay close attention to the accompanying statement for clues about future rate cuts.

Recent data showing inflation remains sticky has led to worries the Fed will lower rates slower than previously anticipated next year.

CME Group’s FedWatch Tool is currently indicating a 96.9 percent chance the Fed will cut rates by a quarter point next week but a 78.8 percent chance the central bank will then leave rates unchanged in late January.

On the inflation front, the Labor Department released a report this morning showing import prices in the U.S. unexpectedly edged higher in the month of November.

Sector News

Gold stocks are extending the sell-off seen in the previous session amid a continued slump by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 2.9 percent.

Considerable weakness is also visible among steel stocks, with the NYSE Arca Steel Index falling by 1.8 percent to its lowest intraday level in almost three months.

Computer hardware, housing and biotechnology stocks are also seeing notable weakness, while semiconductor and networking stocks have shown strong moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slumped by 1.0 percent, while China’s Shanghai Composite Index dove by 2.0 percent.

The major European markets have shown more modest moves to the downside on the day. While the German DAX Index is down by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both down by 0.3 percent.

In the bond market, treasuries are extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.1 basis points at 4.377 percent.

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