U.S. Stocks Giving Back Ground Following Yesterday's Rally

(RTTNews) - Stocks have moved mostly lower in morning trading on Friday, giving back ground following the rally seen in the previous session. The major averages have all moved to the downside, with the tech-heavy Nasdaq leading the pullback.

Currently, the major averages are just off their worst levels of the day. The Nasdaq is down 136.37 points or 1.0 percent at 13,789.69, the S&P 500 is down 28.06 points or 0.6 percent at 4,477.04 and the Dow is down 107.68 points or 0.3 percent at 34,799.43.

The pullback on Wall Street may partly reflect profit taking, with some traders cashing in on yesterday's gains ahead of the next week's Federal Reserve meeting.

While the Fed is widely expected to leave interest rates unchanged next week, the latest batch of U.S. economic data has reignited concerns about the possibility of future rate hikes.

The Labor Department released a report this morning may showing a bigger than expected increase in U.S. import prices in the month of August as well as a much bigger than expected surge in U.S. export prices.

The Labor Department said import prices climbed by 0.5 percent in August after a downwardly revised 0.1 percent uptick in July.

Economists had expected import prices to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the report said export prices spiked by 1.3 percent in August after climbing by a downwardly revised 0.5 percent in July.

Economist had expected export prices to increase by 0.3 percent compared to the 0.7 percent advance originally reported for the previous month.

A separate report released by the New York Fed showed a substantial turnaround in New York manufacturing activity in the month of September.

The Federal Reserve also released a report showing U.S. industrial production increased by much more than expected in the month of August.

The report said industrial production climbed by 0.4 percent in August following a downwardly revised 0.7 percent advance in July.

Economists had expected industrial production to inch up by 0.1 percent compared to the 1.0 percent jump originally reported for the previous month.

Meanwhile, traders have largely shrugged off a report from the University of Michigan showed a notable decrease in near-term and long-term inflation expectations.

Sector News

Housing stocks have shown a substantial move to the downside on the day, dragging the Philadelphia Housing Sector Index down by 2.3 percent.

Significant weakness has also emerged among semiconductor stocks, as reflected by the 2.0 percent slump by the Philadelphia Semiconductor Index.

Software stocks are also seeing considerable weakness in morning trading, with the Dow Jones U.S. Software Index falling by 1.6 percent.

Adobe (ADBE) is posting a steep loss despite reporting fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.

Retail and networking stocks have also moved notably lower, while gold stocks are rallying amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index surged by 1.1 percent, while Hong Kong's Hang Seng Index increased by 0.8 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.7 percent.

In the bond market, treasuries have climbed off their worst levels but remain in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.4 basis points at 4.312 percent.