After showing a lack of direction early in the session, stocks saw some strength in afternoon trading on Friday before once again giving back ground going into the end of the day. The major averages eventually ended the day narrowly mixed.

While the tech-heavy Nasdaq dipped 50.48 points or 0.2 percent to 22,546.67, adding to the steep loss posted on Thursday, the S&P 500 (SPI:SP500) inched crept up 3.41 points or 0.1 percent to 6,836.17 and the Dow inched up 48.95 points or 0.1 percent to 49,500.93.

For the week, the Nasdaq tumbled by 2.1 percent, while the S&P 500 and the Dow slumped by 1.4 percent and 1.2 percent, respectively.

The choppy trading on Wall Street came even after the release of the Labor Department’s highly anticipated report on consumer price inflation in the month of January.

The report showed consumer prices rose by slightly less than expected on a monthly basis, while the annual rate of growth slowed by more than anticipated.

The Labor Department said its consumer price index rose by 0.2 percent in January after climbing by 0.3 percent in December. Economists had expected prices to rise by another 0.3 percent.

The annual rate of growth by consumer prices slowed to 2.4 percent in January from 2.7 percent in December, coming in below estimates of 2.5 percent.

Meanwhile, the Labor Department said core consumer prices, which exclude food and energy prices, increased by 0.3 percent in January after rising by 0.2 percent in December, matching expectations.

The annual rate of growth by core consumer prices dipped to 2.5 percent in January from 2.6 percent in December, which was also in line with estimates.

The tamer-than-expected headline inflation data led to some renewed optimism about the outlook for interest rates and a continued slump by treasury yields.

“This print strengthens the case that the Federal Reserve can maintain a gradual easing bias without fearing renewed inflation pressure,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, “Importantly, while the labor market remains resilient, today’s CPI reduces the risk that strong employment data forces the Fed into a hawkish rethink.”

However, traders continued to express concerns about potential disruptions caused by the recent artificial intelligence buildout, keeping buying interest subdued.

“Some are concerned about excessive levels of spending and others fear AI will disrupt multiple industries,” said Russ Mould, investment director at AJ Bell. “It all adds up to a cocktail of worries and that’s bad for market sentiment more broadly.”

Sector News

Despite the lackluster performance by the broader markets, gold stocks moved sharply higher along with the price of the previous metal, resulting in a 5.6 percent spike by the NYSE Arca Gold Bugs Index.

Considerable strength was also visible among computer hardware stocks, as reflected by the 2.7 percent surge by the NYSE Arca Computer Hardware Index.

Networking, utilities, natural gas and transportation stocks also turned in strong performances on the day, while steel stocks moved to the downside amid a report President Donald Trump plans to roll back tariffs on steel and aluminum.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan’s Nikkei 225 index slumped by 1.2 percent, while Hong Kong’s Hang Seng Index tumbled by 1.7 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index fell by 0.4 percent, the German DAX Index rose by 0.3 percent and the U.K.’s FTSE 100 Index climbed by 0.4 percent.

In the bond market, treasuries extended the strong upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.8 basis points to a two-month closing low of 4.056 percent.

Looking Ahead

Following the Presidents’ Day holiday on Monday, the Commerce Department’s report on personal income and spending is likely to be in focus next week, as it includes the Fed’s preferred inflation readings.

SOURCE: RTTNEWS

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