Stocks Regain Ground After Initial Drop But Remain In The Red - U.S. Commentary

(RTTNews) - After moving notably lower the open, stocks have regained some ground over the course of early trading on Friday. The major averages have climbed well off their lows for the young session but remain in negative territory.

Currently, the major averages are posting moderate losses on the day. The Dow is down 77.71 points or 0.5 percent at 16,092.51, the Nasdaq is down 16.49 points or 0.4 percent at 4,037.61 and the S&P 500 is down 7.03 points or 0.4 percent at 1,826.05.

The initial weakness on Wall Street was partly due to a negative reaction to quarterly results from JP Morgan (JPM), with the financial giant falling by 3.3 percent.

The pullback by JP Morgan comes after the company reported first quarter earnings that fell year-over-year and came in below analyst estimates. The company also reported weaker than expected revenues for the quarter.

The disappointing results from JP Morgan have added to concerns about the impending earnings season, which will really start to pick up steam next week.

Concerns about the valuation of momentum stocks also continue to weigh on the markets after playing a big part in yesterday's sell-off.

Meanwhile, traders have largely shrugged off a report from the Labor Department showing that U.S. producer prices rose by much more than expected in the month of March.

The Labor Department said its producer price index for final demand advanced by 0.5 percent in March after edging down by 0.1 percent in February. Economists had been expecting the index to tick up by 0.1 percent.

Core producer prices, which exclude food and energy, also rose by 0.6 percent in March following a 0.2 percent drop in the previous month. Core prices had been expected to rise by 0.2 percent.

Reuters and the University of Michigan recently released a separate report showing a bigger than expected improvement in consumer sentiment in the month of April.

Banking stocks are seeing notable weakness following the news from JP Morgan, with the Dow Jones Banks Index down by 1.4 percent. However, the index has regained some ground since hitting a two-month intraday low.

Biotechnology and brokerage stocks are also seeing early weakness, while most of the other major sectors are showing more modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index slumped by 0.8 percent.

The major European markets have also come under pressure on the day. While the German DAX Index has tumbled by 1.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.6 percent and 1.4 percent, respectively.

In the bond market, treasuries are seeing modest strength after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 2.618 percent.