Stocks Turning In Lackluster Performance In Mid-Day Trading - U.S. Commentary

(RTTNews) - After ending the previous session mixed, stocks are turning in another lackluster performance during trading on Friday. The choppy trading on Wall Street comes despite the release of a relatively upbeat monthly jobs report.

The major averages are currently on opposite sides of the unchanged line, with the Dow posting a modest gain. The Dow is up 16.19 points or 0.1 percent at 16,438.08, while the Nasdaq is down 22.12 points or 0.5 percent at 4,330.01 and the S&P 500 is down 2.01 points or 0.1 percent at 1,875.02.

While buying interest was initially generated by a report from the Labor Department showing stronger than expected job growth in the month of February, stocks were unable to sustain the early upward move.

The report suggested that the labor market held up relatively well in February despite severe winter weather, but traders seemed to question whether the data supports any further upside for the markets.

The major averages have moved steadily higher throughout much of the past month, with the S&P 500 reaching new record highs. The Nasdaq has also reached its best levels in almost fourteen years.

The report from the Labor Department showed that non-farm payroll employment rose by 175,000 jobs in February compared to economist estimates for an increase of about 150,000 jobs.

Additionally, the report showed a net upward revision to the two previous months of 25,000 jobs, with employment in December and January rising by 84,000 jobs and 129,000 jobs, respectively.

Despite the continued job growth, the unemployment rate edged up to 6.7 percent in February after dipping to a five-year low of 6.6 percent in January. The unemployment rate had been expected to come in unchanged.

Meanwhile, the Labor Department also said average hourly earnings rose 0.4 percent in February, representing the strongest monthly growth since June of last year.

James Knightley, an economist at ING Bank, said, "With more people in work and these workers earning more money it should be good news for consumer spending and confidence and help cement expectations for ongoing Fed asset purchase tapering."

The jobs report overshadowed a separate report from the Commerce Department showing that the U.S. trade deficit edged slightly wider in the month of January.

Sector News

Precious metal stocks are seeing considerable weakness in mid-day trading, dragging the Philadelphia Gold/Silver Sector Index down by 2.3 percent. Freeport-McMoRan (FCX) and Randgold (GOLD) are turning in two of the sector's worst performances.

A decrease by the price of gold is contributing to the weakness in the sector, with gold for April delivery sliding $13.10 to $1,338.70 an ounce.

Significant weakness is also visible among steel stocks, as reflected by the 2 percent loss being posted by the NYSE Arca Steel Index. The index is pulling back toward the one-month closing low it set on Monday.

Computer hardware and commercial real estate stocks have also come under pressure on the day, while most of the other major sectors are showing only modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

Meanwhile, the major European markets came under considerable pressure on the day. While the German DAX Index tumbled by 2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 1.2 percent and 1.1 percent, respectively.

In the bond market, treasuries are seeing notable weakness on the heels of the upbeat jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6 basis points at 2.797 percent.