U.S. Stocks Partly Offsetting Yesterday's Downturn But Remain Off Highs

(RTTNews) – Stocks have moved mostly higher in morning trading on Friday, rebounding following the significant downturn seen over the course of the previous session. The major averages have all moved to the upside but remain below yesterday’s intraday highs.

The major averages have moved roughly sideways in recent trading, hovering in positive territory. The Dow is up 134.75 points or 0.4 percent at 33,471.42, the Nasdaq is up 119.96 points or 0.9 percent at 12,899.88 and the S&P 500 is up 28.07 points or 0.7 percent at 4,235.34.

The markets are benefiting from recent upward momentum, which has lifted the major averages well off their June lows to their highest levels in three months.

Optimism that inflation has peaked has also contributed to the continued strength on Wall Street following this week’s tamer than expected readings on consumer and producer prices.

Adding to the positive sentiment about inflation, the Labor Department released a report showing U.S. import prices fell by more than expected in the month of July.

The Labor Department said import prices slumped by 1.4 percent in July after rising by an upwardly revised 0.3 percent in June. The decrease reflected the first drop in import prices since December 2021.

Economists had expected import prices to decline by 1.0 percent compared to the 0.2 percent uptick originally reported for the previous month.

The report also showed export prices tumbled by 3.3 percent in July after climbing by 0.7 percent in June. Export prices were expected to decrease by 1.1 percent.

Stocks have remained firmly positive after the University of Michigan released a separate report showing consumer sentiment in the U.S. has improved by much more than expected in the month of August.

The report showed the consumer sentiment index jumped to 55.1 in August from 51.5 in July. Economists had expected the index to inch up to 52.5.

With the bigger than expected increase, the consumer sentiment index continued to recover after hitting a record low 50.0 in June.

The University of Michigan also said one-year inflation expectations dipped to 5.0 percent in August from 5.2 percent in July, while five-year inflation expectations crept up 3.0 percent from 2.9 percent.

Surveys of Consumers Director Joanne Hsu noted one-year inflation expectations fell to the lowest level since February but were still well above the 4.6 percent reading from a year ago.

Semiconductor stocks have shown a strong move to the upside, continuing to recover from the sell-off seen early in the week. Reflecting the strength in the sector, the Philadelphia Semiconductor Index is up by 2 percent.

Considerable strength is also visible among gold stocks, resulting in a 1.7 percent advance by the NYSE Arca Gold Bugs Index.

The strength in the gold sector comes amid a modest increase by the price of the precious metal, with gold for December delivery inching up $1.60 to $1,808.80 an ounce.

Networking, airline and computer hardware stocks are also seeing notable strength on the day, while energy stocks are moving lower amid a steep drop by the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index surged by 2.6 percent following a holiday on Thursday, while China’s Shanghai Composite Index dipped by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.7 percent.

In the bond market, treasuries are regaining ground after pulling back sharply over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 2.851 percent.

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