U.S. Stocks Continue To Show A Lack Of DirectionFebruary 19, 2021
For the fourth consecutive session, stocks are turning in a lackluster performance during trading on Friday. The major averages have once again spent the day bouncing back and forth across the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Dow is down 8.90 points or less than a tenth of a percent at 31,421.80, the Nasdaq is up 22.30 points or 0.2 percent at 14,048.08 and the S&P 500 is up 6.82 points or 0.2 percent at 3,923.20.
Profit taking contributed to modest weakness earlier in the session, with the Nasdaq and S&P 500 pulling back off yesterday’s record closing highs, although selling pressure remained subdued.
Recent consolidation efforts have not gained much traction, as traders seem wary of missing out on further upside.
The markets have largely maintained their upward momentum amid optimism about more fiscal stimulus and an easing of the coronavirus crisis.
Meanwhile, traders have largely shrugged off a preliminary report from the University of Michigan showing an unexpected deterioration in U.S. consumer sentiment in the month of February.
The University of Michigan said its consumer sentiment index fell to 76.2 in February after edging down to 79.0 in January. The drop came as a surprise to economists, who had expected the index to inch up to 80.8.
With the unexpected decrease, the consumer sentiment index slid to its lowest level since hitting 74.1 in August of 2020.
Surveys of Consumers chief economist Richard Curtin said the unexpected deterioration in consumer sentiment was concentrated in expectations and among households with incomes below $75,000.
“Households with incomes in the bottom third reported significant setbacks in their current finances, with fewer of these households mentioning recent income gains than anytime since 2014,” Curtin said.
He added, “Presumably a new round of stimulus payments will reduce financial hardships among those with the lowest incomes.”
Traders have recently looked at weak economic data as a positive for the markets amid the assumption that it will put pressure on lawmakers to provide more stimulus.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Brokerage stocks have shown a strong move to the upside, however, with the NYSE Arca Broker/Dealer Index climbing by 1.5 percent to a record intraday high.
Considerable strength is also visible among semiconductor stocks, as reflected by the 1.2 percent gain being posted by the Philadelphia Semiconductor Index. The index has also reached a record intraday high.
Transportation, banking and oil service stocks are also seeing strength in mid-day trading, while utilities stocks have moved to the downside.
In overseas trading, Japanese and Australian stocks moved to the downside on Friday, with most of the other markets in the Asia-Pacific region closed for holidays. Japan’s Nikkei 225 Index edged down by 0.1 percent, while Australia’s S&P/ASX 200 Index fell by 0.6 percent.
Meanwhile, the major European markets moved higher over the course of the session. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index rose by 0.6 percent and the U.K.’s FTSE 100 Index advanced by 0.9 percent.
In the bond market, treasuries have moved to the downside, extending the drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.2 basis points at 1.190 percent.
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