Stocks Posting Modest Losses In Early Trading
With traders digesting a slew of U.S. economic data as well as an increase in China's reserverequirement ratio, stocks are seeing modest weakness in early trading on Friday. The major averages are just below the unchanged line, adding to the slim losses posted in the previous session.
The early weakness is partly due to news that the Bank of China unexpectedly raised its bank reserve requirements by 50 basis points, effective January 20th, to limit inflation amid the country's runaway growth. Nonetheless, selling pressure has remained relatively subdued.
Back in the U.S., a report released a short time ago the Federal Reserve said industrial production increased by 0.8 percent in December following a downwardly revised 0.3 percent increase in November. Industrial production had been expected to increase by about 0.5 percent.
Additionally, the Federal Reserve said that the capacity utilization rate rose to 76.0 percent in December from an upwardly revised 75.4 percent in November. Economists had expected the capacity utilization rate to increase to 75.6 percent.
Earlier, the Labor Department said its consumer price index rose by 0.5 percent in December after edging up by an unrevised 0.1 percent in November. Economists had expected the index to increase by a slightly more modest 0.4 percent.
At the same time, the core consumer price index, which excludes a 4.6 percent jump in energy prices and a modest increase in foods prices, edged up by 0.1 percent in December, matching the increase seen in the previous month and coming in line with economist estimates.
Meanwhile, the Commerce Department reported that retail sales increased by 0.6 percent in December following an unrevised 0.8 percent increase in November. Economists had been expecting sales to show a somewhat more significant increase of about 0.8 percent.
Excluding a 1.1 percent increase in sales by motor vehicle and parts dealers, retail sales rose by 0.5 percent in December compared to a 1.0 percent increase in the previous month. Ex-auto sales had been expected to increase by 0.7 percent.
Shortly, Reuters and the University of Michigan will release the results of their consumer sentiment survey for January at 9:55 a.m. ET. The consumer sentiment index is expected to increase to 75.5 from December's reading of 74.5.
Shortly afterward, the Commerce Department will release its business inventories report for November at 10:00 a.m. ET. The report is expected to show a 0.7 percent increase in inventories.
Gold stocks are seeing early weakness, extending a recent downward move amid a steep drop by the price of the precious metal. While most weakness is also visible among software and biotech stocks, banking stocks are moving to the upside on the day.
The major averages have moved off their lows for the young session but currently remain in the red. TheDow is down 18.96 points or 0.2 percent at 11,712.94, the Nasdaq is down 4.05 points or 0.2 percent at 2,731.24 and the S&P 500 is down 0.40 points or less than a tenth of a percent at 1,283.36.