U.S. Stocks Turning In Mixed Performance Following Inflation Data

After ending the previous session just above the unchanged line, the major U.S. stock indexes are turning in a mixed performance during trading on Friday.

While the Dow is adding to Thursday’s modest gain, the tech-heavy Nasdaq has moved to the downside, hitting its lowest intraday level in a month.

Currently, the Dow is just off its highs of the session, up 149.44 points or 0.4 percent at 35,325.59. The S&P 500 is posting a more modest gain, up 2.92 points or 0.1 percent at 4,471.75, while the Nasdaq is off its worst levels but still down 37.49 points or 0.3 percent at 13,700.49.

The mixed performance on Wall Street comes following the release of a Labor Department report showing producer prices climbed by slightly more than expected in the month of July.

The Labor Department said its producer price index for final demand rose by 0.3 percent in July following a revised unchanged reading in June.

Economists had expected producer prices to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report also showed the annual rate of producer price growth reaccelerated to 0.8 percent in July after slowing to just 0.2 percent in June. The rate of growth was expected to accelerate to 0.7 percent.

While the bigger than increase by the headline index has led to renewed interest rate concerns among some investors, FHN Financial Macro Strategist Will Compernolle noted the more-important index excluding food, energy, and trade services rose in line with estimates.

“The data show that the last two months of consumer goods price disinflation is on solid footing and that more should be on the way,” said Compernolle.

He added, “This is the area of disinflation the Fed and market participants have been expecting for a while, mostly stemming from supply chain normalization.”

A separate report released by the University of Michigan showed a slight pullback in consumer sentiment in the month of August.

The report said the consumer sentiment index edged down to 71.2 in August after spiking to 71.6 in July. Economists had expected the index to slip to 71.0.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Energy stocks are seeing considerable strength, however, with a rebound by the price of crude oil contributing to the strength in the sector.

With crude for September delivery climbing $0.43 to $83.25 a barrel after tumbling $1.58 to $82.82 a barrel on Thursday, the Philadelphia Semiconductor Index is up by 1.3 percent and the NYSE Arca Oil Index is up by 1.2 percent.

Pharmaceutical and housing stocks are also seeing some strength on the day, while significant weakness among semiconductor stocks is weighing on the tech-heavy Nasdaq.

Reflecting the weakness in the sector, the Philadelphia Semiconductor Index has fallen by 1.7 percent to its lowest intraday level inn well over a month.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index plunged by 2.0 percent, while Hong Kong’s Hang Seng Index slid by 0.9 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 1.2 percent, the French CAC 40 Index is down by 1.1 percent and the German DAX Index is down by 0.8 percent.

In the bond market, treasuries have climbed off their worst levels of the day but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 4.127 percent.

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