Stocks Showing A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - Stocks are turning in a lackluster performance in early trading on Friday as traders digest the latest economic and earnings news. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains on the day. The Dow is up 62.66 points or 0.3 percent at 18,232.34, the Nasdaq is up 14.30 points or 0.3 percent at 5,230.28 and the S&P 500 is up 6.12 points or 0.3 percent at 2,139.16.

The choppy trading on Wall Street comes following the release of a report from the Commerce Department showing that U.S. economic activity increased by more than expected in the third quarter.

The report said real gross domestic product climbed by 2.9 percent in the third quarter after rising by 1.4 percent in the second quarter. Economists had expected 2.5 percent growth.

The stronger than expected GDP growth in the third quarter reflects the biggest increase since a 5.0 percent jump in the third quarter of 2014.

The data has generated some optimism about the economy while also increasingly the likelihood of a near-term interest rate hike by the Federal Reserve.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The bigger than expected 2.9% annualized gain in third-quarter GDP growth confirms that the economic recovery has regained some of the momentum lost within the last year."

"As such, this leaves the Fed firmly on track to raise interest rates in December and a hike at next week's FOMC meeting isn't entirely out of the question," he added.

Meanwhile, a separate report from the University of Michigan showed that consumer sentiment deteriorated by more than previously estimated in the month of October.

The University of Michigan said its consumer sentiment index for October was downwardly revised to 87.2 from the preliminary reading of 87.9. The index is down from September's final reading of 91.2.

The downward revision came as a surprise to economists, who had expected the consumer sentiment index to be upwardly revised to 88.5.

On the earnings front, shares of Hershey (HSY) have moved sharply higher in early trading after the chocolate maker reported better than expected third quarter results.

Energy giant Chevron (CVX) has also moved to the upside after reporting third quarter results that exceeded expectations on both the top and bottom lines.

Meanwhile, rival Exxon Mobil (XOM) has come under pressure after reporting better than expected third quarter earnings but on revenues that came in below analyst estimates.

Shares of Amazon (AMZN) have also moved notably lower after the online retailer reported third quarter earnings that came in below estimates.

Computer hardware stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.6 percent. Super Micro Computer (SMCI) is leading the sector higher after reporting better than expected third quarter results.

Networking and housing stocks are also seeing early strength, while weakness is visible among retail and pharmaceutical stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.6 percent, while Hong Kong's Hang Seng Index dropped by 0.8 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.1 percent.

In the bond market, treasuries are seeing modest weakness but have climbed off their early lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 1.854 percent.