Stocks Move Modestly Lower In Early Trading - U.S. Commentary

(RTTNews) - Stocks are seeing modest weakness in early trading on Friday after moving mostly higher over the course of the previous session. The major averages have dipped into negative territory, pulling back off yesterday's record closing highs.

Currently, the major averages are lingering just below the unchanged line. The Dow is down 23.49 points or 0.1 percent at 18,590.03, the Nasdaq is down 6.01 points or 0.1 percent at 5,222.39 and the S&P 500 is down 2.14 points or 0.1 percent at 2,183.65.

The early weakness on Wall Street may be partly due to profit taking following the upward move seen during trading on Thursday.

Negative sentiment was also generated by a report from the Commerce Department showing that U.S. retail sales were unexpectedly flat in the month of July.

The Commerce Department said retail sales were virtually unchanged in July after climbing by an upwardly revised 0.8 percent in June.

Economists had expected sales to rise by 0.4 percent compared to the 0.6 percent increase originally reported for the previous month.

Excluding a jump in auto sales, retail sales fell by 0.3 percent in July after advancing by an upwardly revised 0.9 percent in June. Ex-auto sales had been expected to rise by 0.2 percent.

Sophia Kearney-Lederman, an economic analyst at FTN Financial, said, "Strong auto sales buoyed the headline number but appear to have come at the expense of spending on other consumer goods and services."

"While a slight pullback in sales was expected given the surge in June, the July retail sales report suggests some hesitation by consumers heading into the second half of the year," she added.

A separate report from the University of Michigan showed that consumer sentiment has improved by less than expected in the month of August.

Overall selling pressure has remained relatively subdued, however, with traders seemingly concerned about missing out on further upside for the markets.

Nonetheless, steel stocks have shown a notable move to the downside, dragging the NYSE Arca Steel Index down by 1.5 percent. Ryerson Holding (RYI) is posting a steep loss.

Brokerage and railroad stocks are also seeing some early weakness, while strength has emerged among gold and commercial real estate stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday on the heels of the overnight strength on Wall Street. Japan's Nikkei 225 Index surged up by 1.1 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets are turning in a lackluster performance on the day. While the German DAX Index is down by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both nearly flat.

In the bond market, treasuries have shown a notable rebound following the weakness seen on Thursday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 9.3 basis points at 1.480 percent.