Stocks Seeing Modest Weakness In Morning Trading - U.S. Commentary

(RTTNews) - Following the volatility seen in the previous session, stocks have moved modestly lower in morning trading on Friday. The major averages have all slipped into negative territory, although selling pressure has been subdued.

Currently, the tech-heavy Nasdaq is down 26.68 points or 0.3 percent at 8,092.00, while the Dow and the S&P 500 are just below the unchanged line. The Dow is down 6.32 points at 26,455.76 and the S&P 500 is down 0.28 points at 2,925.89.

A negative reaction to earnings news from big-name companies like Intel (INTC) is contributing to the modest weakness on Wall Street.

Shares of Intel are plunging by 9.5 percent after the semiconductor giant reported better than expected first quarter results but provided disappointing guidance.

Energy giant Exxon Mobil (XOM) has also come under pressure reporting first quarter earnings that missed analyst estimates.

On the other hand, shares of Ford (F) are moving sharply higher after the auto giant reported first quarter results that exceeded analyst estimates on both the top and bottom lines.

Toy maker Mattel (MAT) is also seeing significant strength after reporting a narrower than expected first quarter loss on better than expected revenues.

Meanwhile, a report from the Commerce Department showing an unexpected acceleration in GDP growth initially generated positive sentiment, although analysts have subsequently expressed concerns about the underlying data.

Preliminary data showed real gross domestic product jumped by 3.2 percent in the first quarter after climbing by 2.2 percent in the fourth quarter of 2018.

The acceleration in the pace of growth came as a surprise to economists, who had expected GDP to increase by 2.1 percent.

However, Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Taking out the over-sized boosts from net trade, inventories and highways investment, which will all be reversed in the coming quarters, growth was only around 1.0%."

"Under those circumstances, we continue to expect that overall growth will slow this year, forcing the Fed to begin cutting interest rates before year-end," he added.

With Intel leading the way lower, semiconductor stocks are turning in some of the market's worst performances on the day.

The Philadelphia Semiconductor Index is tumbling by 2.1 percent, pulling back further off the record closing high set on Wednesday.

A steep drop by the price of crude oil is also weighing on energy stocks, with crude for June delivery plunging $1.89 to $63.32 a barrel.

On the other hand, gold stocks are moving sharply higher in morning trading amid a notable increase by the price of the precious metal.

With gold for June delivery climbing $9.30 to $1,289 an ounce, the NYSE Arca Gold Bugs Index is up by 1.8 percent.

Bargain hunting is also contributing to considerable strength among tobacco stocks, with the NYSE Arca Tobacco Index jumping 1.9 percent after slumping to a two-month closing low on Thursday.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is down by 0.2 percent, the French CAC 40 Index and the German DAX Index are up by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries are moving back to the upside after ending the previous session modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 2.498 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.