Stocks Give Back Ground But Remain Mostly Positive - U.S. Commentary

(RTTNews) - After moving to the upside early in the session, stocks have given back some ground but remain mostly positive in mid-day trading on Friday.

Currently, the major averages are posting modest gains. The Dow is up 19.93 points or 0.1 percent at 20,878.12, the Nasdaq is up 17.99 points or 0.3 percent at 5,856.80 and the S&P 500 is up 5.53 points or 0.2 percent at 2,370.40.

The early strength on Wall Street came following the release of a report from the Labor Department showing stronger than expected job growth in the month of February.

The Labor Department said non-farm payroll employment jumped by 235,000 jobs in February after surging up by a revised 238,000 jobs in January.

Economists had expected employment to climb by about 195,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate edged down to 4.7 percent in February from 4.8 percent in January, matching expectations.

The report also said the annual rate of growth in average hourly employee earnings accelerated to 2.8 percent in February from 2.6 percent in January.

"Taking it altogether we have a picture of strong job creation with the tightening labor market increasingly generating wage and inflationary pressures," said ING Senior Economist James Knightley.

While the report initially generated buying interest, traders may be reluctant to make significant moves ahead of the next week's Federal Reserve meeting.

The upbeat jobs data has reinforced expectations of an increase in interest rates at the meeting, with CME Group's FedWatch tool currently indicating a 90.8 probability of a quarter-point rate hike by the central bank.

Sector News

Despite the strength being shown by the broader markets, most of the major sectors are showing only modest moves on the day.

Housing stocks are seeing notable strength, however, with the Philadelphia Housing Sector Index up by 1 percent. The index has still pulled back off the nearly eleven-year intraday high set in early trading.

The strength among housing stocks may be partly due to the Labor Department report showing a significant increase in employment in the construction industry.

Strength also remains visible among semiconductor stocks, as reflected by the 1 percent gain being posted by the Philadelphia Semiconductor Index. Earlier, the index reached its best intraday level since 2000.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index surged up by 1.4 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index climbed by 0.4 percent and the French CAC 40 Index rose by 0.2 percent.

In the bond market, treasures have shown a lack of direction over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.587 percent.