Stocks Showing A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - Stocks are turning in a lackluster performance in early trading on Friday following the rally seen over the course of the previous session. The major averages have been bouncing back and forth across the unchanged line.

Currently, the major averages are posting modest gains on the day. The Dow is up 14.53 points or 0.1 percent at 17,156.28, the Nasdaq is up 7.48 points or 0.2 percent at 4,877.58 and the S&P 500 is up 2.70 points or 0.1 percent at 2,026.56.

The choppy trading on Wall Street partly reflects uncertainty about the near-term outlook for the markets on the heels of the volatility seen over the past several weeks.

While stocks sold off sharply in mid-August amid concerns about developing economies and the outlook for U.S. interest rates, the markets have shown a notable recovery since then.

The rally on Thursday lifted the Dow and the S&P 500 to their best closing levels in nearly two months, although they remain well off their highs from earlier in the year.

The markets have benefited from signs that the Federal Reserve will hold off on raising interest rates, although lingering concerns about the global economy have limited the upside.

Traders are also digesting the latest U.S. economic data, with today's reports showing mixed readings on industrial production and consumer sentiment.

The Federal Reserve released a report showing a modest drop in industrial production in September, while the University of Michigan said its consumer sentiment index rebounded more than expected in October.

Most of the major sectors are showing only modest moves, although notable weakness has emerged among oil service stocks. Reflecting the weakness in the oil service sector, the Philadelphia Oil Service Index is down by 3.1 percent.

Within the oil service sector, Schlumberger (SLB) is posting a notable loss after reporting weaker than expected third quarter revenues.

Steel, airline, and railroad stocks are also seeing early weakness, while notable strength is visible among tobacco stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday following the rally seen on Wall Street overnight. Japan's Nikkei 225 Index jumped by 1.1 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is up by 0.3 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries are showing a lack of direction amid the choppy trading on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.019 percent.