U.S. Stocks Turning In Another Lackluster Performance

After ending the previous session narrowly mixed, stocks are turning in another lackluster performance during trading on Friday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are slightly lower. The Dow is down 13.32 points or less than a tenth of a percent at 34,932.15, the Nasdaq is down 15.96 points or 0.1 percent at 14,097.71 and the S&P 500 is down 0.53 points or less than a tenth of a percent at 4,507.71.

The continued choppy trading on Wall Street comes as traders seem to be taking a moment to assess the recent strength in the markets.

The major averages have trended higher throughout much of November thus far, with the Dow and the Nasdaq reaching three-month highs. The S&P 500 has also reached its best levels in over two months.

Optimism about the outlook for interest rates has contributed to the recent advance, as the latest data has shown signs of easing inflation.

The data has reinforced investors’ expectations that the Federal Reserve will refrain from raising interest rates over the next several months before cutting rates in mid-2024.

The Fed’s next monetary policy meeting is scheduled for December 12-13, with CME Group’s FedWatch Tool currently indicating a 99.8 percent chance the central bank will leave rates unchanged.

However, some economists have suggested Fed officials will maintain a somewhat hawkish tone to avoid the appearance of declaring victory over inflation too soon.

In U.S. economic news, the Commerce Department released a report showing an unexpected increase in new residential construction in the month of October.

The report said housing starts jumped by 1.9 percent to an annual rate of 1.372 million in October after surging by 3.1 percent to a downwardly revised rate of 1.346 million in September.

Economists had expected housing starts to dip to a rate of 1.350 million from the 1.358 million originally reported for the previous month.

The Commerce Department said building permits also shot up by 1.1 percent to an annual rate of 1.487 million in October after plunging by 4.5 percent to a revised rate of 1.471 million in September.

Building permits, an indicator of future housing demand, were expected to decrease to a rate of 1.450 million from the 1.475 million originally reported for the previous month.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Energy stocks have shown a significant move to the upside, however, with a rebound by the price of crude oil contributing to the strength in the sector.

With crude for December delivery surging $2.05 to $74.95 a barrel, Philadelphia Oil Service Index and the NYSE Arca Oil Index are both up by 0.2 percent.

Networking stocks are also seeing considerable strength after falling sharply on Thursday, driving the NYSE Arca Networking Index up by 1.4 percent.

Airline and steel stocks have also moved notably higher on the day, while some weakness is visible among software stocks.

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 rose by 0.5 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.3 percent, the French CAC 40 Index and the German DAX Index are both up by 0.9 percent.

In the bond market, treasuries have turned slightly lower over the course of the session after seeing initial strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 4.457 percent.

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