U.S. Stocks Seeing Modest Strength After Rebounding From Initial Drop

(RTTNews) - Stocks moved to the downside at the start of trading on Friday but have shown a notable turnaround over the course of the morning. The major averages have bounced well off their lows of the session and into positive territory.

The major averages have pulled back off their best levels in recent trading but are currently holding on to modest gains. The Dow is up 82.45 points or 0.2 percent at 36,199.83, the Nasdaq is up 38.62 points or 0.3 percent at 14,378.61 and the S&P 500 is up 10.73 points or 0.2 percent at 4,596.32.

The initial weakness on Wall Street came after the Labor Department released stronger than expected jobs data, partly offsetting recent optimism about the outlook for interest rates.

The closely watched report said non-farm payroll employment jumped by 199,000 jobs in November after rising by 150,000 jobs in October. Economists had expected employment to climb by 180,000 jobs.

The Labor Department also said the unemployment rate dipped to 3.7 percent in November from 3.9 percent in October. The unemployment rate was expected to remain unchanged.

Treasury yields jumped following the release of the report amid concerns strength in the labor market could lead the Federal Reserve to postpone cutting interest rates.

Selling pressure waned shortly after the start of trading, however, as traders remain optimistic the next move by the Fed will be a rate cut even if it comes later than hoped.

Stocks saw further upside after the University of Michigan released a report showing a pullback in consumers' inflation expectations in the month of December.

The report said year-ahead inflation expectations plunged to 3.1 percent in December from 4.5 percent in November, falling to their lowest level since March 2021.

Long-run inflation expectations also fell to 2.8 percent in December from 3.2 percent in November, matching the second lowest reading seen since July 2021.

Sector News

Energy stocks are seeing considerable strength on the day, as the price of crude oil rebounds from its lowest levels in over five months.

With crude for January delivery surging $1.87 to $71.21 a barrel, the Philadelphia Oil Service Index is up by 2.3 percent and the NYSE Arca Oil Index is up by 1.5 percent.

Significant strength is also visible among computer hardware stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Computer Hardware Index.

Banking, networking and semiconductor stocks are also seeing notable strength, while interest rate-sensitive utilities stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while South Korea's Kospi jumped by 1.0 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has surged by 1.4 percent, the U.K.'s FTSE 100 Index is up by 0.9 percent and the German DAX Index is up by 0.7 percent.

In the bond market, treasuries have climbed well 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 9.3 basis points at 4.222 percent.