Stocks Nearly Flat In Mid-Day Trading - U.S. Commentary

(RTTNews) - After showing a lack of direction earlier in the session, stocks continue to turn in a lackluster performance in mid-day trading on Friday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are nearly flat. While the S&P 500 is down 1.09 points or 0.1 percent at 2,088.32, the Dow is up 1.82 points or less than a tenth of a percent at 17,757.63 and the Nasdaq is up 0.27 points or less than a tenth of a percent at 5,074.54.

The choppy trading on Wall Street comes as traders are expressing some uncertainty about the near-term outlook for the markets following the strong upward move seen over the past month.

The major averages are posting substantial gains for the month of October and reached their best levels in over two months earlier this week.

Traders are also digesting a mixed batch of U.S. economic data, which has raised questions about the outlook for interest rates.

Before the start of trading, the Commerce Department released a report showing modest upticks in both personal income and spending.

The report said personal income inched up by 0.1 percent in September after climbing by an upwardly revised 0.4 percent in August. Economists had expected income to rise by 0.2 percent.

Personal spending also crept up by 0.1 percent in September after rising by an unrevised 0.4 percent in August. Spending had also been expected to climb by 0.2 percent.

Meanwhile, MNI Indicators released a separate report showing that Chicago-area business activity unexpectedly expanded in the month of October.

MNI Indicators said its Chicago Business Barometer jumped to 56.2 in October from 48.7 in September, with a reading above 50 indicating growth.

Economists had expected the index to show a much more modest increase to a reading of 49.2, which would have still indicated a contraction.

Sector News

Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Banking stocks are seeing notable weakness, however, with the Dow Jones Banks Index falling by 1.1 percent. The index is pulling back further off the two-month closing high set on Wednesday.

KeyCorp (KEY) has helped to lead the banking sector lower, falling by 6.7 percent after announcing an agreement to acquire rival First Niagara (FNFG) for $4.1 billion.

Railroad, biotechnology, and oil service stocks are also seeing some weakness on the day, although selling pressure has remained subdued.

On the other hand, airline stocks have shown a strong move to the upside, driving the NYSE Arca Airline Index up by 1.2 percent. Virgin America (VA) and Spirit Airlines (SAVE) are posting strong gains.

Notable strength has also emerged among housing stocks, as reflected by the 1.1 percent gain being posted by the Philadelphia Housing Sector Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. Hong Kong's Hang Seng Index slid by 0.8 percent, while Australia's All Ordinaries Index fell by 0.4 percent. However, Japan's Nikkei 225 Index bucked the downtrend and advanced by 0.8 percent.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has crept up by 0.1 percent, the U.K.'s FTSE 100 Index is down y 0.8 percent and the French CAC 40 Index is down by 0.1 percent.

In the bond market, treasuries are seeing modest strength after falling sharply over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.162 percent.