Major Averages Climb Off Lows But Remain Firmly Negative - U.S. Commentary

(RTTNews) - Stocks have climbed off their worst levels of the day but continue to see considerable weakness in mid-day trading on Friday. The major averages are extending a recent see-saw performance, pulling back sharply following the substantial rebound seen in the previous session.

Currently, the major averages are stuck firmly in negative territory. The Dow is down 336.88 points or 1.4 percent at 24,647.67, the Nasdaq is down 151.13 points or 2.1 percent at 7,167.21 and the S&P 500 is down 46.70 points or 1.7 percent at 2,658.87.

The pullback on Wall Street comes amid a negative reaction to corporate results from some big-name companies after upbeat results from companies like Microsoft (MSFT) and Twitter (TWTR) contributed to the jump on Thursday.

Shares of Amazon (AMZN) are seeing significant weakness after the online retail giant reported third quarter earnings that beat estimates but weaker than expected revenues and provided disappointing fourth quarter guidance.

Google parent Alphabet (GOOGL) is also notably lower after also reporting better than expected third earnings but revenues that came in below expectations.

Meanwhile, shares of Intel (INTC) have moved to the upside after the semiconductor giant reported third quarter results that exceeded analyst estimates and raised its full-year guidance.

A report from the Commerce Department showed stronger than expected economic growth in the third quarter, although the data may have added to recent concerns about the outlook for interest rates.

The Commerce Department said real gross domestic product advanced by 3.5 percent in the third quarter after surging up by 4.2 percent in the second quarter. Economists had expected GDP growth to slow to 3.3 percent.

The slowdown in the pace of growth in the third quarter came after the jump in the second quarter represented the fastest growth since a 4.9 percent spike in the third quarter of 2014.

On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth slowed to 1.6 percent in the third quarter from 2.1 percent in the second quarter.

Sector News

Computer hardware stocks continue to see substantial weakness in mid-day trading after falling sharply earlier in the session. The NYSE Arca Computer Hardware Index has climbed off its well over one-year intraday low but remains down by 4.5 percent.

Hard drive maker Western Digital (WDC) led the hardware sector lower after reporting weaker than expected fiscal first quarter results.

Significant weakness also remains visible among retail stocks on the heels of Amazon's disappointing results, with the Dow Jones Retail Index plunging by 3.8 percent. The index hit a four-month intraday low earlier in the day.

Telecom, software, commercial real estate, and semiconductor stocks also continue to see considerable weakness, reflecting broad based selling pressure on Wall Street.

Meanwhile, gold stocks are among the few groups bucking the downtrend, with the NYSE Arca Gold Bugs Index spiking by 3.1 percent after plunging by 6.1 percent on Thursday.

The rebound by gold stocks comes amid an increase by the price of the precious metal, as gold for December delivery is climbing $10.60 to $1,243 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.

The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index tumbled by 1.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both dropped by 0.9 percent.

In the bond market, treasuries have pulled back off their best levels of the day but remain firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.3 basis points at 3.083 percent.
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