U.S. Stocks Pull Back Sharply After Seeing Early Strength

(RTTNews) – After an early move to the upside, stocks have moved sharply lower over the course of morning trading on Friday. The major averages have pulled back well off their highs of the session and slid firmly into negative territory.

Currently, the major averages are just off their worst levels of the day. The Dow is down 116.26 points or 0.4 percent at 29,922.46, the Nasdaq is down 152.16 points or 1.4 percent at 10,496.99 and the S&P 500 is down 38.60 points or 1.1 percent at 3,631.31.

The sharp pullback on Wall Street extends the volatility seen in the previous session, with stocks recovered from an early sell-off to close sharply higher.

Renewed selling pressure seemed to be generated in reaction to a report from the University of Michigan showing a rebound in inflation expectations in the month of October.

One-year inflation expectations climbed to 5.1 in October after dropping to a one-year low of 4.7 in September, while five-year inflation expectations increased to 2.9 percent in October after falling to 2.7 percent in September.

“Last month, long run inflation expectations fell below the narrow 2.9-3.1% range for the first time since July 2021, but since then expectations have returned to that range at 2.9%,” said Surveys of Consumers Director Joanne Hsu.

The data may have led to renewed inflation concerns after optimism inflation has peaked contributed to the substantial turnaround on Thursday.

Meanwhile, traders are also reacting to earnings news from several big-name financial companies, with JPMorgan Chase (JPM) posting a strong gain after reporting third quarter results that beat analyst estimates on both the top and bottom lines.

Shares of Wells Fargo (WFC) have also shown a notable move to upside after the company reported better than expected third quarter revenues.

On the other hand, shares of Morgan Stanley (MS) have moved to the downside after the investment bank reported third quarter results that missed analyst estimates.

Gold stocks have moved sharply lower over the course of the morning, dragging the NYSE Arca Gold Bugs Index down by 3.1 percent.

The sell-off by gold stocks comes amid a notable decrease by the price of the precious metal, with gold for December delivery slumping $23.10 to $1,653.90 an ounce.

Considerable weakness has also emerged among semiconductor stocks, resulting in a 2.8 percent plunge by the Philadelphia Semiconductor Index.

A steep drop by the price of crude oil is also weighing on energy stocks, as crude for November delivery is tumbling $3.15 to $85.96 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 2.7 percent and the NYSE Arca Oil Index is down by 2.6 percent.

Steel, chemical and housing stocks have also come under pressure, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan’s Nikkei 225 Index soared by 3.3 percent, while China’s Shanghai Composite Index shot up by 1.8 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index is up by 0.9 percent and the U.K.’s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries have turned lower over the course of the morning after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.6 basis points at 3.998 percent after hitting a low of 3.851 percent.

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