Stocks Turning In Lackluster Performance In Early Trading - U.S. Commentary

(RTTNews) - Following recent volatility in the days surrounding Election Day, stocks are turning in a relatively lackluster performance in early trading on Friday. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest losses on the day. The Dow is down 35.89 points or 0.2 percent at 18,771.99, the Nasdaq is down 7.78 points or 0.2 percent at 5,201.02 and the S&P 500 is down 9.07 points or 0.4 percent at 2,158.41.

The choppy trading on Wall Street comes as the markets are pausing to take a breath after gains seen in reaction to President-election Donald Trump's surprise victory lifted the Dow to a record closing high on Thursday.

Some traders may also be away from their desks due to the Veterans Day holiday, as banks and the bond markets are closed on the day.

On the U.S. economic front, the University of Michigan released a report showing a much bigger than expected rebound in consumer sentiment in the month of November.

The preliminary report showed that the consumer sentiment index jumped to 91.6 in November after slumping to 87.2 in October. Economists had expected the index to inch up to 87.5.

With the bigger than expected increase, the consumer sentiment index reached its highest level since climbing to 94.7 in May.

However, Richard Curtin, the survey's chief economist, said the most striking finding in early November was a jump in both near and long-term inflation expectations.

The report said one-year inflation and five-year inflations expectations both spiked to 2.7 percent in November from 2.4 percent in October.

"These increases must be replicated before they can be taken to indicate a troublesome development," Curtin said. "Nonetheless, it may be viewed as added justification for next month's expected interest rate hike."

With regard to interest rates, Federal Reserve Vice Chairman Stanley Fischer said the case for gradually removing accommodation is quite strong, as the Fed is close to achieving its dual mandate.

"In my view, the prospects of a continued steady expansion in the U.S. economy are maximized to the extent that we proceed with a gradual removal of accommodation," Fischer said in remarks to a central banking conference in Santiago, Chile.

He added, "Such a gradual approach to tightening policy will also help mitigate the risk of undesirable spillovers abroad--including by reducing the risk of having to tighten more abruptly later on--and in turn promote a stronger global economy."

While many of the major sectors are showing only modest moves, substantial weakness has emerged among gold stocks. The NYSE Arca Gold Bugs Index has tumbled by 4 percent to a seven-month intraday low.

The weakness in the gold sector comes amid a steep drop by the price of the precious metal, with gold for December delivery plummeting $31.10 to $1,235.30 an ounce.

Steel, energy, and biotechnology stocks are also under pressure following recent rallies, while strength is visible among semiconductor, commercial real estate and electronic storage stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday following the mixed closed on Wall Street overnight. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index slumped by 1.4 percent.

The major European markets have also turned mixed over the course of the trading session. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index is down by 0.8 percent and the U.K.'s FTSE 100 Index is down by 1.4 percent.

Meanwhile, as mentioned above, the bond markets are closed for the day in honor of the Veterans Day holiday.