Stocks Continue To Turn In A Lackluster Performance - U.S. Commentary

(RTTNews) - After ending the previous session mixed, stocks continue to turn in a lackluster performance in mid-day trading on Friday. The Nasdaq has moved modestly higher after falling sharply in the two previous sessions, while the Dow has pulled back off yesterday's record closing high.

Currently, the major averages are once again on opposite sides of the unchanged line. While the Dow is down 9.14 points or 0.1 percent at 19,182.79, the Nasdaq is up 10.81 points or 0.2 percent at 5,261.92 and the S&P 500 is up 3.66 points or 0.2 percent at 2,194.74.

The choppy trading on Wall Street comes following the release of the Labor Department's closely watched monthly employment report for November.

The report said non-farm payroll employment climbed by 178,000 jobs in November following a downwardly revised increase of 142,000 jobs in October.

Economists had expected employment to increase by about 170,000 jobs compared to the addition of 161,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate fell to 4.6 percent in November from 4.9 percent in October. The unemployment rate had been expected to remain unchanged.

With the unexpected decrease, the unemployment rate fell to its lowest level since hitting a matching rate in August of 2007.

The unexpected drop by the unemployment rate partly reflected a decrease in labor force participation, with the participation rate edging down to 62.7 in November from 62.8 in October.

The report also said average hourly employee earnings fell by $0.03 to $25.89 in November. The annual rate of wage growth subsequently slowed to 2.5 percent from 2.8 percent.

Nonetheless, the stronger than expected job growth shown by the report is likely reinforce expectations that the Federal Reserve will rates interest rates at its next meeting later this month.

"That weak wage figure will probably raise a few eyebrows among some of the more dovish Fed voters," said James Smith, Developed Markets Economist at ING. "But it would have had to have been a really disastrous jobs report to have derailed the FOMC's plans to hike in December."

He added, "In fact, assuming that the latest wage growth figure was a blip, we still think that the labor market is strong enough to support two hikes from the FOMC next year."

Traders may be reluctant to make more significant moves ahead of an Italian referendum of an overhaul of the country's legislature on Sunday.

Sector News

Despite the relatively lackluster performance by the broader markets, gold stocks have shown a substantial move to the upside. Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index has surged up by 3.8 percent.

The gains by gold stocks come amid a rebound by the price of the precious metal, with gold for February delivery climbing $8.10 to $1,177.50 an ounce after hitting a ten-month low on Thursday.

Significant strength has also emerged among airline stocks, as reflected by the 1.6 percent advance by the NYSE Arca Airline Index.

Commercial real estate, electronic storage, and biotechnology stocks also seeing considerable strength, while banking stocks are giving back some ground following recent gains.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index dropped by 0.5 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.

The major European markets also ended the day lower but off their worst levels. While the French CAC 40 Index slid by 0.7 percent, the U.K.'s FTSE 100 Index and the German DAX Index edged down by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries are regaining some ground after moving sharply lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 2.383 percent.