Dow, S&P 500 Inch Up To New Record Highs Amid Choppy Trading

After ending the previous session mostly higher, stocks are showing a lack of direction in morning trading on Friday. Despite the choppy trading, both the Dow and the S&P 500 have reached new record intraday highs.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 27.95 points or 0.2 percent at 13,801.36, the Dow is up 57.16 points or 0.2 percent at 33,560.73 and the S&P 500 is up 2.29 points or 0.1 percent at 4,099.46.

The lackluster performance on Wall Street comes as traders express some uncertainty about the near-term outlook for the markets following recent strength.

Optimism about a swift economic recovery has helped prop up the markets, although some traders may be wary that the rebound has already been priced in.

Profit taking may be contributing to the modest pullback by the tech-heavy Nasdaq after technology stocks showed a strong move to the upside in the previous session.

Meanwhile, the uptick by the Dow partly reflects a notable advance by shares of Honeywell (HON), with the conglomerate climbing by 1.7 percent.

The gain by Honeywell comes after Deutsche Bank upgraded its rating on the company’s stock to Buy from Hold.

On the U.S. economic front, the Labor Department released a report showing producer prices jumped by much more than expected in the month of March.

The Labor Department said its producer price index for final demand surged up by 1.0 percent in March after climbing by 0.5 percent in February. Economists had expected another 0.5 percent increase.

Excluding prices for food, energy, and trade services, core producer prices rose by 0.6 percent in March after edging up by 0.2 percent in February. Economists had expected another 0.2 percent uptick.

Meanwhile, the Labor Department said the annual rate of producer price growth spiked to 4.2 percent in March from 2.8 percent in February.

Core producer prices in March were up by 3.1 percent compared to a year ago, reflecting a significant acceleration from the 2.2 percent increase in the previous month.

“The fiscally stimulated revival of consumer demand and strong base effects will lead to faster annual inflation rates in the spring,” said Mahir Rasheed, Associate U.S. Economist at Oxford Economics.

He added, “However, these should be temporary dynamics, and we continue to expect the Fed to remain accommodative through mid-2023.”

Reflecting the lackluster performance by the broader markets, most of the major sectors are showing only modest moves on the day.

Airline stocks have shown a notable move to the downside, however, with the NYSE Arca Airline Index slumping by 1.5 percent.

Significant weakness has also emerged among steel stocks, as reflected by the 1.2 percent drop by the NYSE Arca Steel Index.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, although Japan’s Nikkei 225 Index bucked the downtrend and edged up by 0.2 percent. China’s Shanghai Composite Index slumped by 0.9 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the French CAC 40 Index is just below the unchanged line and the U.K.’s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries have regained ground after an initial drop but remain lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 1.659 percent.