Stocks Continue To Turn In A Lackluster Performance - U.S. Commentary

(RTTNews) - Following the release of the closely watched monthly jobs report, stocks have had difficulty sustaining any significant moves during trading on Friday. The major averages have spent much of the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance on the day. While the Nasdaq is up 7.23 points or 0.1 percent at 5,134.97, the Dow is down 25.99 points or 0.2 percent at 17,837.44 and the S&P 500 is down 8.11 points or 0.4 percent at 2,091.82.

The choppy trading on Wall Street comes after the Labor Department released a report showing much stronger than expected job growth in the month of October.

The strong job growth is a positive sign for the U.S. economy, but the data also increases the likelihood the Federal Reserve will raise interest rates next month.

The report said non-farm payroll employment jumped by 271,000 jobs in October compared to economist estimates for an increase of about 185,000 jobs.

The unemployment rate subsequently fell to a seven-year low of 5.0 percent in October, matching economist estimates.

The focus on the jobs report was intensified by Federal Reserve Chair Janet Yellen's recent comments about interest rates.

In testimony before the House Financial Services Committee on Wednesday, Yellen said a December rate hike would be a "live possibility" if the incoming economic data supports such a move.

Among individual stocks, shares of Weight Watchers (WTW) have moved sharply higher after the weight loss company reported better than third quarter results and raised its guidance.

Entertainment giant Disney (DIS) has also moved to the upside after reporting better than expected fourth quarter adjusted earnings but on revenues that were shy of estimates.

On the other hand, shares of Men's Wearhouse (MW) are showing a steep drop after the clothing retailer slashed its third quarter and full-year profit outlook.

Sector News

Reflecting concerns about the outlook for monetary policy, interest rate-sensitive utilities stocks are seeing substantial weakness on the day. The Dow Jones Utilities Average has plunged by 4.1 percent, hitting its lowest intraday level in nearly two months.

Within the utilities sector, CenterPoint Energy (CNP), Duke Energy (DUK), and Con Ed (ED) are turning in some of the worst performances.

Gold stocks have also moved sharply lower, dragging the NYSE Arca Gold Bugs Index down by 3.4 percent. The weakness in the sector comes as the price of gold for December delivery is tumbling $17.70 to $1,086.50 an ounce.

Commercial real estate, steel, tobacco, and energy stocks are also under pressure, with energy stocks moving lower along with the price of crude oil.

On the other hand, significant strength is visible among financial stocks. Reflecting the strength in the sector, the NYSE Arca Broker/Dealer Index and the Dow Jones Banks Index are up by 2.7 percent and 2.6 percent, respectively.

Semiconductor stocks have also moved notably higher, driving the Philadelphia Semiconductor Index up by 2.3 percent. Qorvo (QRVO) and Nvidia (NVDA) are posting standout gains after reporting better than expected quarterly earnings.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index dropped by 0.8 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index crept up by 0.1 percent and the German DAX Index climbed by 0.9 percent.

In the bond market, treasuries have fallen sharply in reaction to the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, has surged up by 8.4 basis points to 2.329 percent.