Stocks Fluctuating Amid Looming Government Shutdown - U.S. Commentary

( - Stocks have fluctuated over the course of the trading day on Friday, extending the substantial volatility seen over the past several sessions. The major averages have shown wild swings back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is up 35.10 points or 0.2 percent at 22,894.70, the Nasdaq is down 67.41 points or 1 percent at 6,461.00 and the S&P 500 is down 3.35 points 0.1 percent at 2,464.07.

The choppy trading on Wall Street comes as traders keep an eye on developments on Capitol Hill amid a looming government shutdown.

With just hours to go before a midnight deadline, lawmakers appear to be at an impasse over funding for President Donald Trump's controversial wall on the border with Mexico.

The currently Republican-controlled House voted 217 to 185 in favor of a short-term spending bill late Thursday, although the bill includes $5 billion for the construction of the wall opposed by Democrats.

House Republicans took up the bill, which also provides $7.8 billion for disaster relief, after Trump said he would not sign a stopgap spending approved the Senate that did not include wall funding.

The Senate bill passed by a voice vote Wednesday night would fund key government agencies through February 8th but pushes a debate over funding for the wall into the next Congress, when Democrats will control the House.

The Senate is not expected to pass a spending bill including wall funding, as Democratic votes would be needed to reach the 60-vote threshold.

In posts on Twitter, Trump sought to blame Democrats for the potential shutdown after previously saying he would be "proud to shut down the government for border security," an issue that helped propel him to the White House.

"The Democrats, whose votes we need in the Senate, will probably vote against Border Security and the Wall even though they know it is DESPERATELY NEEDED," Trump tweeted.

"If the Dems vote no, there will be a shutdown that will last for a very long time," he added. "People don't want Open Borders and Crime!"

Meanwhile, traders are also digesting mixed economic data on durable goods orders, third quarter GDP, personal income and spending and consumer sentiment.

Some buying interest was generated in morning trading after New York Federal Reserve President John Williams told CNBC the Fed is listening "very carefully" to the market's concerns about growth.

"We are listening, there are risks to that outlook that maybe the economy will slow further," Williams said in an interview on CNBC's "Squawk on the Street."

He added, "What we're going to be doing going into next year is re-assessing our views on the economy, listening to not only markets but everybody that we talk to, looking at all the data and being ready to reassess and re-evaluate our views."

The comments by Williams offset some of the recent concerns that the Fed intends to follow-through on plans to continuing raising rates despite signs of slowing global economic growth.

Sector News

Biotechnology stocks have shown a substantial move to the downside over the course of the session, contributing to the steep drop by the Nasdaq.

Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index is tumbling by 2 percent to its lowest intraday level in over a year.

Considerable weakness has also emerged among software stocks, with the Dow Jones Software Index slumping by 1.6 percent.

On the other hand, interest rate-sensitive utilities stocks have shown a strong move to the upside, driving the Dow Jones Utilities Average up by 1.2 percent.

Chemical and oil service stocks are also seeing significant strength, with oil service stocks benefiting from a modest rebound by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan'sNikkei 225 Index slumped by 1.1 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets ended the day modestly higher. While the German DAX Index edged up by 0.2 percent, the U.K.'sFTSE 100 Index inched up by 0.1 percent and the French CAC Index closed just above the unchanged line.

In the bond market, treasuries have shown a lack of direction over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.796 percent.

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