U.S. Stocks Give Back Ground After Early Advance But Remain Positive

(RTTNews) - After an early move to the upside, stocks have given back some ground over the course of the trading day on Friday. The major averages have pulled back off their highs of the session but remain in positive territory.

Currently, the major averages are posting modest gains. The Dow is up 94.26 points or 0.3 percent at 34,489.40, the Nasdaq is up 38.78 points or 0.3 percent at 14,177.34 and the S&P 500 is up 5.43 points or 0.1 percent at 4,515.47.

The early strength on Wall Street partly reflected ongoing optimism about the Federal Reserve being close to ending its monetary policy tightening following recent encouraging inflation data.

Buying interest was also generated in reaction to upbeat earnings news from financial giants JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C).

However, shares of JPMorgan and Wells Fargo have subsequently pulled back near the unchanged line, and shares Citigroup has come under pressure as the company's second quarter earnings beat analyst estimates but decreased year-over-year.

Trades may also be somewhat reluctant to continue buying stocks following the rally seen this week, which has lifted the Nasdaq and the S&P 500 to their best levels in over a year.

In U.S. economic news, a report released by the Labor Department showed a modest decrease in import prices in the month of June.

The Labor Department said import prices dipped by 0.2 percent in June after falling by a revised 0.4 percent in May.

Economists had expected import prices to edge down by 0.1 percent compared to the 0.6 percent decrease originally reported for the previous month.

Meanwhile, the report said export prices slumped by 0.9 percent in June after tumbling by 1.9 percent in May. Export prices were expected to slip by 0.2 percent.

A separate report released by the University of Michigan showed consumer sentiment has improved by much more than anticipated in the month of July

The report showed the consumer sentiment index soared to 72.6 in July from 64.4 in June. Economists had expected the index to tick up to 65.5.

With the much bigger than expected surge, the consumer sentiment index reached its highest level since hitting 72.8 in September 2021.

Sector News

Despite the uptick by the broader markets, networking stocks have moved sharply lower on the day, dragging the NYSE Arca Networking Index down by 3.3 percent.

Substantial weakness has also emerged among airline stocks, as reflected by the 2.7 percent nosedive by the NYSE Arca Airline Index.

Telecom, banking and energy stocks are also seeing considerable weakness on the day, limiting the upside for the broader markets.

On the other hand, software stocks have shown a strong move to the upside, driving the Dow Jones U.S. Software Index up by 1.3 percent to its best intraday level in well over a year.

Notable strength among healthcare and pharmaceutical stocks is also helping to offset the weakness in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. South Korea's Kospi shot up by 1.4 percent and Hong Kong's Hang Seng Index rose by 0.3 percent, although Japan's Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is up by 0.1 percent, the U.K.'s FTSE 100 Index is just below the unchanged line and the German DAX Index is down by 0.2 percent.

In the bond market, treasuries are giving back ground after moving sharply higher over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 3.789 percent.