Nasdaq Bounces Into Positive Territory But Dow Remains Firmly Negative

After coming under pressure early in the session, stocks have fluctuated over the course of the trading day on Friday. While the Dow has remained firmly in negative territory, the tech-heavy Nasdaq has climbed well off its early lows.

The Nasdaq has been bouncing back and forth across the unchanged line in recent trading and is currently up 34.21 points or 0.2 percent at 15,214.65. Meanwhile, the Dow is down 388.18 points or 1.1 percent at 35,509.46 and the S&P 500 is down 23.66 points or 0.5 percent at 4,645.01.

The early weakness on Wall Street came as stocks continue to give back ground following the rally seen in reaction to the Federal Reserve’s monetary policy announcement on Wednesday.

Traders initially seemed relieved the Fed’s move to accelerate the reduction in its asset purchases to $30 billion per month was not as aggressive as some had feared.

The Fed’s forecast for three interest rates hikes next year also eliminated some uncertainty, although traders now seem to be grappling with the reality of sooner-than-expected rate hikes.

Concerns about the impact of the Omicron variant of the coronavirus also weighed on the markets along with worries about ongoing supply chain issues.

The subsequent volatility comes on a “quadruple witching” day, with stock options, index options, stock futures and index futures all expiring.

A lack of major U.S. economic data may also be contributing to the choppy trading, as traders look ahead to next week’s reports on consumer confidence, personal income and spending, durable goods orders and new and existing home sales.

Sector News

Banking stocks continue to see considerable weakness in afternoon trading, with the KBW Bank Index slumping by 2.4 percent after hitting a nearly three-month intraday low earlier in the session.

Significant weakness also remains visible among housing stocks, as reflected by the 1.4 percent drop by the Philadelphia Housing Sector Index.

On the other hand, airline stocks have moved sharply higher over the course of the session, resulting in a 3.1 percent spike by the NYSE Arca Airline Index.

Substantial strength has also emerged among biotechnology stocks, resulting in a 2.7 percent jump by the NYSE Arca Biotechnology Index.

Novavax (NVAX) is posting a standout gain after the World Health Organization gave emergency approval to the biotech company’s coronavirus vaccine.

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 tumbled by 1.8 percent, while South Korea’s Kospi rose by 0.4 percent.

Meanwhile, European stocks moved mostly lower on the day. The French CAC 40 Index slumped by 1.1 percent and the German DAX Index slid by 0.7 percent, although the U.K.’s FTSE 100 Index bucked the downtrend and inched up by 0.1 percent.

In the bond market, treasuries have pulled back off their best levels of the day but remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 1.397 percent.

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