Stocks Showing A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - Stocks are turning in a lackluster performance in early trading on Friday after turning higher over the course of the previous session. The major averages are showing only modest moves, lingering near the unchanged line.

Currently, the major averages are turning in a mixed performance, with the Nasdaq posting a modest loss. While the Nasdaq is down 3.54 points or 0.1 percent at 4,237.13, the Dow is up 28.48 points or 0.2 percent at 16,056.07 and the S&P 500 is up 2.10 points or 0.1 percent at 1,831.93.

The choppy trading on Wall Street comes as traders express some uncertainty about the outlook for the markets following the volatility seen over the past few weeks.

With the upward move seen in recent sessions, the markets have partly offset the sell-off seen in late January. While the Dow remains well off its record highs, the tech-heavy Nasdaq has climbed within striking distance of the thirteen-year highs it set last month.

Traders also continue to digest a recent batch of disappointing economic data that was seemingly distorted by the severe winter weather.

A report released before the start of trading this morning showed an unexpected drop in industrial production, although the Federal Reserve noted that the weather curtailed manufacturing production in some regions of the country.

The report said industrial production fell by 0.3 percent in January after rising by 0.3 percent in December. The pullback came as a surprise to economists, who had expected production to increase by another 0.3 percent.

"Industrial production usually bounces back after a period of bad weather, as postponed orders are completed," said Paul Dales, Senior U.S. Economist at Capital Economics. " With the weather having been just as severe in February, however, this may not happen until March."

"But it will happen eventually," he added. "After all, the fundamentals have not changed. The outlooks for the domestic and global economies are still better than for some time."

Most of the major sectors are showing only modest moves in early trading, although substantial strength has emerged among gold stocks. The NYSE Arca Gold Bugs Index has surged up by 3.7 percent, benefiting from a jump by the price of gold.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher, although Japan's Nikkei 225 Index bucked the uptrend and dropped by 1.5 percent. Australia's All Ordinaries Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has dipped below the unchanged line, the French CAC 40 Index and the German DAX Index are up by 0.4 percent and 0.6 percent, respectively.

In the bond market, treasuries are showing a lack of direction after ending the previous session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its prices is up by less than a basis point at 2.737 percent.