Stocks Give Back Ground After Early Buying Interest Fades - U.S. Commentary

(RTTNews) - After failing to sustain an early upward move, stocks have given back some ground over the course of the trading day on Friday. The pullback by the markets comes as traders continue to cash in on the strong performance that was seen last year.

While the Dow is clinging to a modest gain, the broader Nasdaq and S&P 500 have slid into negative territory. The Dow is up 6.75 points or less than a tenth of a percent at 16,448.10, while the Nasdaq is down 16.48 points or 0.4 percent at 4,126.58 and the S&P 500 is down 2.23 points or 0.1 percent at 1,829.75.

Traders initially picked up stocks at somewhat reduced levels following yesterday's pullback, but buying interest waned not long after the open.

The subsequent pullback by the markets may party reflect a negative reaction to disappointing monthly sales from the major automakers.

General Motors (GM) unexpectedly reported December sales that fell year-over-year, while Ford (F) and Chrysler both reported sales that rose by less than expected.

Traders are also looking ahead to remarks from a number of Federal Reserve officials, including Chairman Ben Bernanke.

Bernanke is scheduled to speak on the changing Fed in Philadelphia at 2:30 pm ET, and the Fed Chief's remarks are likely to attract attention amid a relatively quiet news day.

The speech is expected to be one of Bernanke's last public appearances before the end of his eight-year run as the Chairman of the Fed at the end of the month.

Sector News

Despite the pullback by the broader markets, airline stocks continue to see significant strength in mid-day trading. The NYSE Arca Airline Index has surged up by 2.6 percent and is on pace to end the session at its best closing level in over a month.

Within the airline sector, shares of Delta (DAL) have jumped by 4.3 percent after the airline reported a 6.9 percent increase in December traffic.

Meanwhile, telecom stocks have come under pressure on the day, extending the downward move seen in the previous session. The NYSE Arca Telecom Index is down by 1.2 percent, pulling back further off the six-year high set on Tuesday.

Sprint (S) has helped to lead the telecom sector lower, tumbling by 4.8 percent after Stifel downgraded its rating on the company's stock to Sell from Hold.

Biotechnology and natural gas stocks have also moved to the downside, while most of the other major sectors are showing only modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Hong Kong's Hang Seng Index plummeted by 2.2 percent, while China's Shanghai Composite Index tumbled by 1.2 percent. The Japanese markets remained closed.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index and the French CAC 40 Index rose by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries continue to see modest weakness after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 3.002 percent.