U.S. Stocks Move Mostly Lower Amid Interest Rate, Economic Worries

Stocks are mostly lower in morning trading on Friday, moving back to the downside following yesterday’s tech-led rebound. The Nasdaq has pulled back sharply after posting a standout gain on Thursday.

Currently, the major averages are all firmly in negative territory. The Nasdaq is down 132.01 points or 1.0 percent at 13,498.60, the S&P 500 is down 28.08 points or 0.6 percent at 4,353.81 and the Dow is down 185.73 points or 0.6 percent at 33,760.98.

Overseas weakness has carried over onto Wall Street amid ongoing concerns about the outlook for interest rates and the global economy.

Rate hikes in England and other countries along with the Federal Reserve’s forecast for additional rate increases have reignited worries tighter monetary policy will tip the global economy into recession.

Trading activity remains somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

The economic calendar picks back up next week with the release of reports on durable goods orders, consumer confidence, new home sales and pending home sales.

The Commerce Department is also due to release its report on personal income and spending in the month of May, which includes a reading on inflation said to be preferred by the Fed.

The consumer price inflation data could significantly impact opinions regarding whether the Fed will follow through on its forecast rate hikes.

Sector News

Oil service stocks have moved sharply lower on the day, with an extended slump by the price of crude oil weighing on the sector.

With crude for August delivery tumbling $1.12 to $68.39 a barrel, the Philadelphia Oil Service Index is down by 1.7 percent.

Considerable weakness is also visible among airline stocks, as reflected by the 1.6 percent drop by the NYSE Arca Airline Index. The index continues to give back ground after reaching its best closing level in over a year on Wednesday.

Networking, semiconductor and computer hardware stocks are also seeing notable weakness, contributing to the sharp pullback by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong’s Hang Seng Index plunged by 1.7 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 0.9 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

In the bond market, treasuries have shown a notable rebound after coming under pressure on Thursday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.8 basis points at 3.731 percent.

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