Stocks See Further Downside Following Early Weakness - U.S. Commentary

(RTTNews) - After coming under pressure in early trading, stocks have seen some further downside over the course of the trading day on Friday. With the losses on the day, the S&P 500 is pulling back well off the record closing high that it set in the previous session.

The major averages have recently climbed well off their worst levels of the day but remain firmly in the red. The Dow is down 135.89 points or 0.8 percent at 16,947.91, the Nasdaq is down 31.63 points or 0.7 percent at 4,440.48 and the S&P 500 is down 10.37 points or 0.5 percent at 1,977.61.

A negative reaction to the latest batch of earnings news is contributing to the weakness on Wall Street, with shares of Amazon (AMZN) falling by 11 percent.

The steep loss by Amazon comes after the online retailer reported a wider than expected second quarter loss after the close of trading on Thursday.

Credit card giant Visa (V) has also come under pressure after reporting better than expected third quarter earnings but lowering its full-year revenue guidance.

Pandora (P) and Swift Transportation (SWFT) are also moving notably lower after reporting their quarterly results, while shares of Baidu (BIDU) have shown a strong move to the upside.

Geopolitical concerns also continue to weigh on the markets, as traders keep a close eye on the ongoing conflicts in Ukraine and Gaza.

News of Ukrainian Prime Minister Arseniy Yatsenyuk's resignation has added to worries about the situation in Ukraine, while the Palestinian death toll in Gaza has reportedly topped 800.

Traders may also be moving their money into less risky assets ahead of several potentially market moving events next week. The Federal Reserve is scheduled to announce it latest monetary policy decision next Wednesday, while the Labor Department is due to release its closely watched monthly jobs report next Friday.

Meanwhile, traders have largely shrugged off a report from the Commerce Department showing a bigger than expected rebound in durable goods orders in the month of June.

The Commerce Department said durable goods orders increased by 0.7 percent in June following a 1.0 percent decrease in May. Economists had been expecting orders to climb by about 0.5 percent.

Excluding orders for transportation equipment, durable goods orders rose by a slightly stronger 0.8 percent in June compared to a 0.1 percent drop in the previous month.

Sector News

Adding to steep losses posted in the two previous sessions, semiconductor stocks have moved sharply lower on the day. The Philadelphia Semiconductor Index has plunged by 2.1 percent, hitting its lowest intraday level in well over a month.

Maxim Integrated (MXIM) is leading the semiconductor sector lower after reporting weaker than expected fourth quarter results and providing disappointing guidance.

Retail stocks are also seeing significant weakness in mid-day trading, with the Dow Jones Retail Index falling by 1.5 percent. The disappointing earnings news from Amazon is likely weighing on the sector.

Natural gas, biotechnology, and computer hardware stocks have also moved to the downside on the day, while gold stocks are bucking the downtrend amid an increase by the price of the precious metal.

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 surged up by 1.1 percent, while India's BSE Sensex dropped by 0.6 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.5 percent and 1.8 percent, respectively.

In the bond market, treasuries are regaining some ground after ending the previous session notably lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.5 basis points at 2.474 percent.