U.S. Stocks Move To The Downside After Showing A Lack Of Direction In Early Trading

(RTTNews) - After showing a lack of direction early in the session, stocks have come under pressure over the course of the trading day on Friday. The major averages have slid more firmly into negative territory after bouncing back and forth across the unchanged line earlier in the day.

Currently, the major averages are off their lows of the session but still in the red. The Dow is down 126.40 points or 0.3 percent at 37,583.70, the Nasdaq is down 120.73 points or 0.8 percent at 14,974.40 and the S&P 500 is down 25.54 points or 0.5 percent at 4,757.81.

The weakness that has emerged on Wall Street may partly reflect profit taking, as some traders look to cash in on the recent strength in the markets.

Traders have previously seemed hesitant to cash in on the recent gains amid concerns about missing out on further upside but have apparently decided the final trading day of the year is the right time to lock in some gains.

Overall trading activity has remained relatively subdued, however, with some traders looking to get a head start on New Year's festivities.

Trading activity may pick back up next week, as the Labor Department is scheduled to release its closely watched monthly jobs report next Friday.

Reports on manufacturing and service sector activity may also attract attention along with the minutes of the latest Federal Reserve meeting.

In U.S. economic news, MNI Indicators released a report showing a substantial downturn by Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer tumbled to 46.9 in December from 55.8 in November, with a reading below 50 indicating contraction. Economists had expected the index to drop to 51.0.

Sector News

Airline stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Airline Index down by 1.9 percent.

Considerable weakness has also emerged among networking stocks, as reflected by the 1.1 percent loss being posted by the NYSE Arca Networking Index.

Commercial real estate stocks have also moved notably lower, with the Dow Jones U.S. Real Estate Index falling by 1.0 percent. The index ended Thursday's trading at a ten-month closing high.

Oil service, semiconductor and transportation stocks have also moved to the downside over the course of the session.

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 dipped by 0.2 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

Meanwhile, the major European markets all moved modestly higher on the day. While the German DAX Index rose by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries are seeing modest weakness, extending the pullback seen on Thursday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 3.868 percent.