WASHINGTON (dpa-AFX) - After moving to the downside early in the session, stocks continue to see modest weakness in mid-day trading on Friday. While selling pressure has been relatively subdued, the major averages remain stuck in negative territory.
Currently, the tech-heavy Nasdaq continues to underperform its counterparts. The Nasdaq is down 47.64 points or 0.6 percent at 7,789.19, while the Dow is down 50.90 points or 0.2 percent at 26,055.87 and the S&P 500 is down 9.24 points or 0.3 percent at 2,882.40.
Tech stocks have come under pressure after Broadcom reported better than expected fiscal second quarter earnings but lowered its full-year revenue guidance.
Broadcom President and CEO Hock Tan said the chip maker sees a 'broad-based slowdown in the demand environment' due to continued geopolitical uncertainties and the effects of export restrictions on Chinese tech giant Huawei.
The comments from Tan have led to renewed concerns about the impact of the U.S.-China trade dispute on the broader tech sector.
Traders are also digesting a Commerce Department report showing a substantial upward revision to retail sales data for April.
The Commerce Department said retail sales climbed by 0.5 percent in May after rising by an upwardly revised 0.3 percent in April.
Economists had expected retail sales to increase by 0.6 percent compared to the 0.2 percent drop originally reported for the previous month.
Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, climbed by 0.5 percent in May. The April reading was upwardly revised from no change to a 0.4 percent gain.
FTN Financial chief economist Chris Low called the April revisions the 'real story' of the report, noting the 'trajectory of second quarter consumption just transformed from ho-hum to solid.'
'Needless to say, this is important,' Low said. 'The collapse of consumption in Q1 and failure of consumption to recover in April was one of the most compelling reasons justifying an interest rate cut.'
'There are still other reasons, of course. Business confidence has tumbled. Business investment has slowed. Manufacturing is in trouble,' he added. 'But consumers, it seems, are alright, which means the risk of recession is diminished.'
The Federal Reserve also released a report showing a bigger than expected increase in industrial production in May, although the University of Michigan said its reading on consumer sentiment dropped in June amid concerns about higher tariffs.
Oil service stocks have shown a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 3.4 percent. The index is pulling back after spiking by 3.7 percent on Thursday.
The pullback by oil service comes even though the price of crude oil is extending the upward move seen in the previous session, with crude for July delivery climbing $0.55 to $52.83 a barrel.
Significant weakness also remains visible among semiconductor stocks, as reflected by the 2.8 percent slump by the Philadelphia Semiconductor Index. Broadcom has led the sector lower, plunging by 6.5 percent.
Tobacco, steel, and networking stocks are also seeing considerable weakness on the day, while gold stocks are moving higher along with the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index slumped by 1 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slid by 0.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index dipped by 0.3 percent and 0.2 percent, respectively.
In the bond market, treasuries have shown a lack of direction over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.084 percent.
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