U.S. Stocks Little Changed After Recovering From Initial Weakness

(RTTNews) - After recovering from an initial move to the downside, stocks have shown a lack of direction over the course of the trading day on Friday. The major averages bounced off their early lows and have spent much of the rest of the session lingering near the unchanged line.

Currently, the major averages are narrowly mixed. While the S&P 500 is down 2.55 points or 0.1 percent at 3,980.62, the Dow is up 22.47 points or 0.1 percent at 34,212.44 and the Nasdaq is up 7.26 points or 0.1 percent at 11,008.36.

The initial weakness on Wall Street came as traders looked to cash in on some the recent strength in the markets amid a negative reaction to earnings news from several big-name financial companies.

Shares of JPMorgan Chase (JPM) slumped early in the session even though the company reported fourth quarter results that beat analyst estimates on both the top and bottom lines.

JPMorgan also announced an increase in reserves for credit losses, as the firm's macroeconomic outlook now reflects a "mild recession in the central case."

However, shares of JPMorgan have shown a notable turnaround over the course of the session and are currently up by 2.5 percent.

Financial giants Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC) have also rebounded from initial weakness after reporting their fourth quarter results.

The recovery on Wall Street partly came as upbeat consumer sentiment and inflation expectations data helped offset the early negative sentiment.

The University of Michigan said its consumer sentiment index jumped to 64.6 in January from 59.7 in December. Economists had expected the index to inch up to 60.5.

With the much bigger than expected increase, the consumer sentiment index reached its highest level since hitting 65.2 in April 2022.

"Consumer sentiment remained low from a historical perspective but continued lifting for the second consecutive month, rising 8% above December and reaching about 4% below a year ago," said Surveys of Consumers Director Joanne Hsu.

The report also showed a continued decrease in one-year inflation expectations, which tumbled to 4.0 percent in January from 4.4 percent in December, falling for the fourth straight month.

"The current reading is the lowest since April 2021 but remains well above the 2.3-3.0% range seen in the two years prior to the pandemic," said Hsu.

Sector News

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

Gold stocks have shown a strong move to the upside, however, driving the NYSE Arca Gold Bugs Index up by 1.8 percent.

The strength among gold stocks comes amid an increase by the price of the precious metal, with gold for February delivery jumping $21 to $1,919.80 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index bucked the uptrend and tumbled by 1.3 percent. China's Shanghai Composite Index and Hong Kong's Hang Seng Index both jumped by 1.0 percent.

The major European markets also moved to the upside on the day. While the German DAX Index inched up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index climbed by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries have pulled back after failing to sustain an early recovery attempt. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.6 basis points at 3.485 percent.