U.S. Stocks Giving Back Ground After Seeing Early Strength

U.S. Stocks Giving Back Ground After Seeing Early Strength

September 29, 2023

Stocks moved mostly higher early in the session on Friday but have come under pressure in recent trading. The major averages have pulled back well off their highs of the session, with the Dow slipping into negative territory.

Currently, the major averages are turning in a mixed performance. While the Dow is down 66.71 points or 0.2 percent at 34,003.71, the S&P 500 is up 1.60 points or less than a tenth of a percent at 4,331.60 and the Nasdaq is up 38.94 points or 0.3 percent at 13,262.93.

The early strength on Wall Street partly reflected bargain hunting, with traders picking up stocks at reduced levels following the sell-off seen over the two previous sessions.

The steep drops seen on Wednesday and Thursday dragged the tech-heavy Nasdaq down to its lowest closing level in over three months.

The S&P 500 also slumped to a nearly three-month closing low, while the narrower Dow slid to a two-month closing low.

Buying interest has waned over the course of the session, however, as concerns about the outlook for interest rates continue to weigh on the markets.

While the Federal Reserve left interest rates unchanged as widely expected on Wednesday, the central bank forecast another rate hike before the end of the year as well as keeping rates at elevated levels for longer than previously anticipated.

Traders may also have been reluctant to make significant bets ahead of the release of some key economic data next week that could impact the outlook for interest rates.

Next week will see the release of a report on personal income and spending that includes readings on inflation said to be preferred by the Fed.

Sector News

Airline stocks have come under pressure over the course of the session, dragging the NYSE Arca Airline Index down by 1.5 percent to its lowest intraday level in almost six months.

Significant weakness has also emerged among banking stocks, as reflected by the 1.3 percent loss being posted by the KBW Bank Index. The index has fallen to a nearly three-month intraday low.

Meanwhile, semiconductor stocks are seeing continued strength, with the Philadelphia Semiconductor Index climbing by 1.2 percent after ending Thursday’s trading at a nearly four-month closing low.

Strength also remains visible among computer hardware and networking stocks, helping the tech-heavy Nasdaq hold on to a modest gain.

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 slid by 0.5 percent, while China’s Shanghai Composite Index jumped by 1.6 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the German DAX Index edged down by 0.1 percent and the French CAC 40 Index fell by 0.4 percent.

In the bond market, treasuries are regaining ground following the sell-off seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.6 basis points at 4.424 percent.

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