Stocks Continue To Show A Lack Of Direction In Mid-Day Trading - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks continue to turn in a lackluster performance in mid-day trading on Friday. The choppy trading extends the roughly sideways trend shown by the markets over the past two weeks.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 4.48 points or 0.1 percent at 4,557.81, the Dow is up 8.48 points or 0.1 percent at 17,078.06 and the S&P 500 is up 0.62 points or less than a tenth of a percent at 1,998.27.

The lackluster performance on Wall Street comes following the release of a Labor Department report showing much weaker than expected U.S job growth in the month of August.

The Labor Department said non-farm payroll employment increased by 142,000 jobs in August compared to economist estimates for the addition of about 225,000 jobs.

While the report also said employment climbed by an upwardly revised 212,000 jobs in July, employment rose by a downwardly revised 267,000 jobs in June, reflecting a net downward revision of 28,000 jobs.

Despite the weaker than expected job growth, the unemployment rate edged down to 6.1 percent in August from 6.2 percent in July due to a decrease in the size of the labor force.

Paul Ashworth, Chief U.S. Economist at Capital Economics, noted that the disappointing data will inevitably spark speculation that the U.S. recovery is coming off the rails but said the weak job growth is probably just an isolated blip.

The data has generated some uncertainty about the outlook for monetary policy, with some analysts predicting that the report will reinforce the Federal Reserve's wait-and-see stance.

Meanwhile, traders have largely shrugged off news that Ukraine and pro-Russian separatists have reached a preliminary ceasefire agreement.

Among individual stocks, shares of Quiksilver (ZQK) have moved sharply lower on the day after the action sports apparel maker reported weaker than expected third quarter results. Quiksilver has plunged by 29.3 percent on the news.

Apparel retailer Gap (GPS) is also posting a notable loss after reporting comparable store sales for August that fell 2 percent year-over-year.

On the other hand, shares of Infoblox (BLOX) are turning in a strong performance after the automated network control company reported better than expected fourth quarter results.

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.

Biotechnology stocks have come under considerable selling pressure, however, with the NYSE Arca Biotechnology Index falling by 1.1 percent. With the drop, the index is pulling back further off the record closing high it set on Tuesday.

Gilead Sciences (GILD) is posting a steep loss after Bloomberg said the biopharmaceutical company is close to an agreement with generic drugmakers to bring low-cost versions of its $84,000 hepatitis C drug Sovaldi to about 80 developing countries.

Gold and banking stocks are also seeing moderate weakness on the day, while utilities stocks have shown a notable move to the upside.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw modest weakness during trading on Friday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries are seeing moderate strength on the heels of the disappointing jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 2.418 percent.