Stocks Taking A Breather Following Recent Rally - U.S. Commentary

(RTTNews) - Stocks are turning in a lackluster performance in early trading on Friday as traders take a break following the recent upward trend. The major averages are lingering near the unchanged line after ending the previous session sharply higher.

Currently, the major averages are turning in a mixed performance, although they are all nearly flat. While the S&P 500 is down 0.95 points or 0.1 percent at 1,674.07, the Dow is up 4.95 points or less than a tenth of a percent at 15,465.87 and the Nasdaq is up 3.29 points or 0.1 percent at 3,581.59.

The choppy trading comes as traders seem somewhat reluctant to continue buying stocks after recent strength lifted the Dow and the S&P 500 to new record closing highs on Thursday.

Traders are also digesting the release of a report from the Labor Department showing a bigger than expected increase in producer prices in the month of June.

The Labor Department said its producer price index rose by 0.8 percent in June following a 0.5 percent increase in May. Economists had been expecting the price growth to match the increase seen in the previous month.

Excluding food and energy prices, core producer prices edged up by 0.2 percent in June after inching up by 0.1 percent in May. Core prices had been expected to tick up by 0.1 percent.

The report generated mild concerns about the outlook for inflation and its potential impact on the Federal Reserve's plans for monetary policy.

The mild inflation concerns offset earlier positive sentiment that was generated by better than expected earnings news from financial giants JP Morgan (JPM) and Wells Fargo (WFC).

Most of the major sectors are showing only modest moves in early trading, although gold stocks are seeing considerable weakness amid a decrease by the price of the precious metal.

Steel and trucking stocks have also moved to the downside, while some early strength is visible among banking and semiconductor stocks.

Among individual stocks, shares of UPS (UPS) have come under pressure after the delivery giant forecast weaker than expected second quarter earnings. UPS is currently down by 5.7 percent.

UPS cited overcapacity in the global air freight market, increasing customer preference for lower-yielding shipping solutions, and a slowing U.S. industrial economy for the disappointing guidance.

Meanwhile, shares of WebMD (WBMD) have surged up by 24.6 percent after the health information services provider raised its full-year guidance.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index ended the day down by 0.8 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is down by 0.2 percent, the German DAX Index is up by 0.6 percent and the U.K.'s FTSE 100 Index is up by 0.1 percent.

In the bond market, treasuries continue to recover from the sell-off that was seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 2.533 percent.