Major Averages Continue To Turn In Mixed Performance In Afternoon Trading

(RTTNews) - The major U.S. stock indexes moved in opposite directions early in the session on Friday and continue to turn in a mixed performance in afternoon trading.

While the Dow has pulled back off its best levels of the day, the blue chip index remains up 77.74 points or 0.2 percent at 35,253.89 amid strong gains by Merck (MRK) and Chevron (CVX).

Meanwhile, the tech-heavy Nasdaq has regained some ground after hitting its lowest intraday level in a month but remains down 79.08 points or 0.6 percent at 13,658.91.

The S&P 500 has spent the day bouncing back and forth across the unchanged line and is currently down 6.83 points or 0.2 percent at 4,462.00.

The mixed performance on Wall Street comes following the release of a Labor Department report showing producer prices climbed by slightly more than expected in the month of July.

The Labor Department said its producer price index for final demand rose by 0.3 percent in July following a revised unchanged reading in June.

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

The report also showed the annual rate of producer price growth reaccelerated to 0.8 percent in July after slowing to just 0.2 percent in June. The rate of growth was expected to accelerate to 0.7 percent.

While the bigger than increase by the headline index has led to renewed interest rate concerns among some investors, FHN Financial Macro Strategist Will Compernolle noted the more-important index excluding food, energy, and trade services rose in line with estimates.

"The data show that the last two months of consumer goods price disinflation is on solid footing and that more should be on the way," said Compernolle.

He added, "This is the area of disinflation the Fed and market participants have been expecting for a while, mostly stemming from supply chain normalization."

A separate report released by the University of Michigan showed a slight pullback in consumer sentiment in the month of August.

The report said the consumer sentiment index edged down to 71.2 in August after spiking to 71.6 in July. Economists had expected the index to slip to 71.0.

Sector News

Semiconductor stocks have shown a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.3 percent to its lowest intraday level in well over a month.

Considerable weakness has also emerged among airline stocks, with the NYSE Arca Airline Index falling by 1.7 percent to a two-month intraday low.

Computer hardware stocks are also seeing notable weakness in afternoon trading, resulting in a 1.2 percent drop by the NYSE Arca Computer Hardware Index.

On the other hand, energy stocks continue to see some strength amid a rebound by the price of crude oil, driving both the Philadelphia Oil Service Index and the NYSE Arca Oil Index up by 1.0 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index plunged by 2.0 percent, while Hong Kong's Hang Seng Index slid by 0.9 percent.

The major European markets also showed notable moves to the downside on the day. While the German DAX Index slumped by 1.0 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index tumbled by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries have moved sharply lower in reaction to the latest inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.8 basis points at 4.158 percent.