U.S. Stocks Give Back Ground After Early Move To The Upside

(RTTNews) - Stocks moved mostly higher in early trading on Friday but have given back ground over the course of the session. The major averages have pulled back well off their highs of the session and into negative territory.

Currently, the major averages are posting modest losses. The Dow is down 104.72 points or 0.3 percent at 37,335.62, the Nasdaq is down 2.22 points or less than a tenth of a percent at 14,508.08 and the S&P 500 is down 2.72 points or 0.1 percent at 4,685.96.

The volatility on the day comes as traders digest some key U.S. economic data, including a closely watched Labor Department report showing stronger than expected job growth in December.

While the data initially raised concerns about the outlook for interest rates, positive sentiment prevailed as traders digested the details of the report, which also showed notable downward revisions to job growth in October and November.

The Labor Department said non-farm payroll employment surged by 216,000 jobs in December compared to economist estimates for an increase of about 170,000 jobs.

At the same time, the increases in employment in October and November were downwardly revised to 105,000 jobs and 173,000 jobs, respectively, reflecting a net downward revision of 71,000 jobs.

"There's no recession threat in this report, nor any reason for the Fed to worry about overheating," said FHN Financial Chief Economist Chris Low. "It is as safely down the middle as they come."

The Institute for Supply Management also released a report showing a bigger than expected slowdown in the pace of U.S. service sector growth.

The ISM said its services PMI fell to 50.6 in December from 52.7 in November. While a reading above 50 still indicates growth, economists had expected the index to show a much more modest decrease to 52.6.

The data has also contributed to significant volatility in the bond markets, with treasury yields spiking after the jobs report before pulling back after the ISM report and now moving back to the upside.

Sector News

Despite the pullback by the broader markets, airline stocks continue to turn in a strong performance, with the NYSE Arca Airline Index climbing by 1.9 percent.

Notable strength also remains visible among banking stocks, as reflected by the 1.4 percent gain being posted by the KBW Bank Index. Earlier in the session, the index reached a nearly ten-month intraday high.

Most of the other major sectors are showing more modest moves on the day, although some weakness has emerged among networking and commercial real estate stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. China's Shanghai Composite Index slumped by 0.9 percent and Hong Kong's Hang Seng Index slid by 0.7 percent, although Japan's Nikkei 225 Index bucked the downtrend and rose by 0.3 percent.

The major European markets also moved to the downside on the day. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both fell by 0.4 percent.

In the bond, treasuries have once again come under pressure after recovering from an early sell-off. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.5 basis points at 4.046 percent.