Stocks Showing A Lack Of Direction Following Recent Strength - U.S. Commentary

(RTTNews) - After trending higher in recent sessions, stocks are turning in a lackluster performance in early trading on Friday. The major averages are showing only modest moves, although the Dow and the S&P 500 still managed to reach new record intraday highs.

Currently, the major averages are posting modest gains. The Dow is up 35.08 points or 0.2 percent at 15,911.30, the Nasdaq is up 0.36 points or less than a tenth of a percent at 3,973.10 and the S&P 500 is up 1.38 points or 0.1 percent at 1,792.00.

The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves, taking a breather following the recent move to the upside.

Stocks are largely holding on to their recent gains, however, with Janet Yellen's dovish comments helping to support the markets.

Meanwhile, traders are shrugging off a batch of largely disappointing economic data, including a report from the Federal Reserve showing an unexpected drop in industrial production.

The report said industrial production edged down by 0.1 percent in October after climbing by an upwardly revised 0.7 percent in September.

Economists had been expecting production to inch up by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

Commenting on the report, Rob Carnell, chief international economist at ING, said the headline appears worse than the underlying picture.

"Most of the softness was concentrated in utilities and mining, in particular natural gas extraction, where on-going price softness seems to have weighed on extraction activity and production has been feeble for some months," Carnell said.

A separate report from the New York Fed showed an unexpected contraction in regional manufacturing activity in November, while the Labor Department released a report showing a bigger than expected drop in import prices in October.

Most of the major sectors are showing only modest moves, although networking stocks are seeing considerable strength after ending the previous session sharply lower.

The NYSE Arca Networking Index has advanced by 1 percent, partly offsetting yesterday's 2.3 percent loss. Juniper Networks (JNPR) and Alcatel-Lucent (ALU) are posting notable gains.

Biotechnology and telecom stocks are also seeing some early strength, while weakness is visible among electronic storage stocks.

In overseas trading, stock markets across the Asia-Pacific region saw considerable strength during trading on Friday. Japan's Nikkei 225 Index surged up by 2 percent, while Hong Kong's Hang Seng Index advanced by 1.7 percent.

Meanwhile, the major European markets are seeing modest strength. While the German DAX Index is up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.2 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.698 percent.