WASHINGTON (dpa-AFX) - Stocks are seeing moderate strength in mid-day trading on Friday following the volatility seen earlier in the session. The major averages are off their highs of the session but also off their worst levels of the day.
Currently, the major averages are posting modest gains. The Dow is up 64.87 points or 0.2 percent at 26,591.45, the Nasdaq is up 24.64 points or 0.3 percent at 7,992.40 and the S&P 500 is up 9.72 points or 0.3 percent at 2,934.64.
Banking stocks helped lead the markets higher early in the session in reaction to news that all 18 of the largest banks in the U.S. passed the Federal Reserve's annual stress test.
The Fed said it is not objecting to the capital plans of the 18 firms but is requiring the U.S. division of Credit Suisse to address limited weaknesses identified from the test.
Financial giants such as Goldman Sachs (GS), J.P. Morgan (JPM), Bank of America (BAC) and Citigroup (C) celebrated by announcing dividend increases and share repurchases.
Buying interest waned shortly after the start of trading, however, as traders eagerly await a meeting between President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit.
Trump and Xi are not expected to come out of the meeting with a finalized trade deal, but traders will be looking for signs of progress toward kick-starting the stalled negotiations between the two economic superpowers.
The subsequent pullback by stocks was partly due to the release of a report from MNI Indicators unexpectedly showing a contraction in Chicago-area business activity in the month of June.
MNI Indicators said its Chicago business barometer tumbled to 49.7 in June after rising to 54.2 in May, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the index to edge down to 53.1.
With the much steeper than expected decline, the Chicago businesses barometer dropped below 50 for the first time since January of 2017.
Nonetheless, positive sentiment has reemerged since then as traders remain optimistic about a construction meeting between Trump and Xi.
Sector News
After an initial jump, banking stocks fluctuated over the course of the morning but are seeing considerable strength in mid-day trading.
Reflecting the strength in the sector, the KBW Bank Index is up by 1.8 percent after reaching its best intraday level in well over a month.
Significant strength also remains visible among biotechnology stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Biotechnology Index.
Transportation, energy, and housing stocks are also seeing notable strength on the day, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index slid by 0.6 percent.
Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index advanced by 0.8 percent and the German DAX Index jumped by 1 percent.
In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.007 percent.
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