U.S. Stocks Remain Sharply Lower After Early Sell-Off

(RTTNews) - After moving sharply lower early in the session, stocks continue to see significant weakness in afternoon trading on Friday. The major averages have more than offset the gains posted in the previous session, with the Dow hitting a two-month intraday low.

Currently the major averages are off their worst levels of the day but still sharply lower. The Dow is down 367.32 points or 1.1 percent at 32,786.59, the Nasdaq is down 222.33 points or 1.9 percent at 11,368.07 and the S&P 500 is down 50.63 points or 1.3 percent at 3,961.69.

The early sell-off on Wall Street came following the release of a report from the Commerce Department showing an unexpected acceleration in the annual rate of growth by core consumer prices in the month of January.

The report said annual growth by core consumer prices, which exclude food and energy prices, accelerated to 4.7 percent in January from an upwardly revised 4.6 percent in December.

Economists had expected the annual rate of growth by core consumer prices to slow to 4.3 percent from the 4.4 percent originally reported for the previous month.

Including food and energy prices, consumer price growth also accelerated to 5.4 percent in January from 5.3 percent in December. The rate of growth was expected to slow to 4.9 percent.

The unexpected acceleration in core consumer price growth has added to recent concerns about the outlook for interest rates.

Paul Ashworth, Chief North America Economist at Capital Economics, called the data "another sign that the Fed might have to leave its policy rate higher for longer."

Meanwhile, traders have largely shrugged off separate reports showing a surge in new home sales and a slightly bigger than previously estimated improvement in consumer sentiment.

Sector News

Networking stocks continue to see substantial weakness in afternoon trading, with the NYSE Arca Networking Index plunging by 2.7 percent to its lowest intraday level in a month.

Significant weakness also remains visible among steel stocks, as reflected by the 2.5 percent slump by the NYSE Arca Steel Index.

Software stocks also continue to see considerable weakness, dragging the Dow Jones U.S. Software Index down by 2.4 percent.

Adobe (ADBE) is posting a steep loss after a report from Bloomberg said the Justice Department is preparing an antitrust lawsuit seeking to block the company's $20 billion acquisition of startup Figma.

Tobacco, semiconductor ad commercial real estate stocks have also shown notable moves to the downside, reflecting broad based weakness on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Friday. Japan's Nikkei 225 Index jumped 1.3 percent following the holiday on Thursday, while Hong Kong's Hang Seng Index tumbled by 1.7 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the German DAX Index and the French CAC 40 Index plunged by 1.7 percent and 1.8 percent, respectively.

In the bond market, treasuries have pulled back sharply after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9 basis points at 3.969 percent.