After an initial move to the upside, stocks have given back ground over the course of morning trading on Friday. The major averages have pulled back off their highs of the session, with the Nasdaq and the S&P 500 falling to their lowest intraday levels in over two months.
Currently, the major averages are turning in a mixed performance. While the Dow is up 22.53 points or 0.1 percent at 33,866.45, the Nasdaq is down 70.76 points or 0.5 percent at 14,377.82 and the S&P 500 is down 6.24 points or 0.1 percent at 4,301.30.
Bargain hunting contributed to initial strength on Wall Street after stocks ended a disappointing September on a sour note on Thursday.
Buying interest waned shortly after the start of trading, however, as traders expressed continued concerns about inflation and the Federal Reserve scaling back its asset purchases.
Stocks came under pressure after a report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity but noted persistent supply chain issues.
The ISM said is manufacturing PMI crept up to 61.1 in September from 59.9 in August, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to edge down to 59.6.
“Manufacturing performed well for the 16th straight month, with demand, consumption and inputs registering month-over-month growth, in spite of continuing unprecedented obstacles and ever-increasing demand,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, “Panelists’ companies and their supply chains continue to struggle to meet demand due to difficulties in hiring and a clear cycle of labor turnover, as workers opt for more attractive job opportunities.”
Biotechnology stocks have moved sharply lower in morning trading, dragging the NYSE Arca Biotechnology Index down by 1.8 percent to its lowest intraday level in nearly four months.
Regeneron Pharmaceuticals (REGN) is posting a steep loss despite revealing a trial assessing its experimental antibody cocktail REGEN-COV in patients hospitalized with COVID-19 met its primary endpoint.
Considerable weakness has also emerged among semiconductor stocks, as reflected by the 1.1 percent drop by the Philadelphia Semiconductor Index. The index hit its lowest intraday level in well over a month earlier in the session.
On the other hand, airline stocks have shown a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 2.7 percent.
Southwest Airlines (LUV) is posting a strong gain after JPMorgan upgraded its rating on the company’s stock to Overweight from Neutral.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday, with markets in China closed for a holiday. Japan’s Nikkei 225 Index plummeted by 2.3 percent, while Australia’s S&P/ASX 200 Index tumbled by 2 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index has edged down by 0.2 percent, the German DAX Index is down by 0.9 percent and the U.K.’s FTSE 100 Index is down by 1.1 percent.
In the bond market, treasuries have moved notably higher, extending the uptick seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.7 basis points at 1.482 percent.
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