Stocks Remain Mostly Negative In Mid-Day Trading - U.S. Commentary

(RTTNews) - After coming under pressure earlier in the session, stocks remain mostly negative in mid-day trading on Friday. The losses on the day have party offset the gains posted in the two previous sessions, although the major averages remain well off Tuesday's lows.

The major averages have recently climbed off their worst levels of the day but remain firmly in the red. The Dow is down 144.06 points or 0.8 percent at 17,895.31, the Nasdaq is down 29.42 points or 0.6 percent at 5,053.09 and the S&P 500 is down 13.79 points or 0.7 percent at 2,095.07.

Concerns about Greece's stalled negotiations with its international creditors are contributing to the weakness on Wall Street following yesterday's news that the International Monetary Fund has halted bailout talks.

With a repayment deadline looming at the end of the month, the lack of progress in the talks has led to renewed worries about a possible default by Greece.

Jonathan Loynes, Chief European Economist at Capital Economics, said, "Greece's creditors have made it clear that the ball is firmly in its court to make the concessions needed to reach a last-minute agreement."

"But even if Greece finally blinks, the stop-gap deal that will probably result is unlikely to bring a permanent end to the crisis," he added.

Several officials told Reuters that the possibility of a Greek default has been formally discussed for the first time among senior European Union officials.

Meanwhile, traders have largely shrugged off the latest batch of U.S. economic data, including a report from the University of Michigan showing a much bigger than expected improvement in consumer sentiment in June.

The report said the preliminary reading on the consumer sentiment index for June came in at 94.6 compared to the final may reading of 90.7. Economists had expected the index to show a much more modest increase to 91.2.

Before the start of trading, the Labor Department released a separate report showing that producer prices rose by more than expected in May due to a substantial rebound in energy prices.

Sector News

Biotechnology stocks continue to see considerable weakness in mid-day trading, with the NYSE Arca Biotechnology Index down by 1.7 percent. The index remains stuck in a recent trading range.

Agios Pharmaceuticals (AGIO) is leading the biotech sector lower, tumbling by 14 percent despite reporting an impressive response rate for its leukemia treatment.

Significant weakness is also visible among energy stocks, as reflected by the 1.2 percent loss being posted by the NYSE Arca Oil & Gas Index. The weakness in the sector comes as crude oil for July delivery is falling $0.81 to $59.96 a barrel.

Steel, trucking, and pharmaceutical stocks are also seeing notable weakness on the day, while most of the other major sectors have shown more modest moves to the downside.

On the other hand, airline stocks continue to buck the downtrend, resulting in a 1.2 percent gain by the NYSE Arca Airline Index. The index continues to recover from the six-month closing low set on Tuesday.

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 inched up by 0.1 percent, while Australia's All Ordinaries Index dipped by 0.2 percent.

Meanwhile, the major European markets all came under pressure on the day. While the U.K.'s FTSE 100 Index dropped by 0.9 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.2 percent and 1.4 percent, respectively.

In the bond market, treasuries are seeing continued strength following the substantial rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 2.359 percent.