WASHINGTON (dpa-AFX) - After coming under pressure at the start of trading on Friday, stocks have regained some ground over the course of the morning. The major averages have climbed well off their worst levels, although the tech-heavy Nasdaq continues to post a steep loss.
Currently, the major averages all remain in negative territory, but the Nasdaq is underperforming its counterparts. While the Nasdaq is down 119.99 points or 1.2 percent at 10,341.43, the Dow is down 51.78 points or 0.2 percent at 26,600.55 and the S&P 500 is down 12.39 points or 0.4 percent at 3,223.27.
A sell-off by shares of Intel (INTC) is weighing on the Nasdaq, with the semiconductor giant plunging by 16.9 percent to a four-month intraday low.
Intel came under pressure after reporting better than expected second quarter results but warning of further delays in production of its next-generation chips.
The initial weakness on Wall Street also came amid concerns about rising tensions between the U.S. and China after Beijing decided to revoke the license for the establishment and operation of the U.S. Consulate General in Chengdu.
The move comes just days after the U.S. government ordered China to close its consulate in Houston, Texas, amid accusations Chinese diplomats aided in economic espionage and the attempted theft of scientific research.
A statement from China's Foreign Ministry claimed the move by the U.S. violated international law and seriously damaged U.S.-China relations and called the closure of the U.S. consulate in Chengdu a 'legitimate and necessary response to the unreasonable actions of the United States.'
'The current situation between China and the United States is something China does not want to see, and the responsibility rests entirely with the United States,' the statement said, urging the U.S. to immediately revoke the 'erroneous decision.'
Worries about the continued spike in coronavirus cases also generated some negative sentiment, with the U.S. reporting 68,663 new cases on Thursday, according to data compiled by Johns Hopkins University.
According to analysis by CNBC, daily new cases are rising, on average, by at least 5 percent in 25 states and the District of Columbia as of Thursday.
However, selling pressure waned following the release of a Commerce Department report showing new home sales in the U.S. continued to spike in the month of June.
The Commerce Department said new home sales soared by 13.8 percent to an annual rate of 776,000 in June after skyrocketing by 19.4 percent to a revised rate of 682,000 in May.
Economists had expected new home sales to jump 3.6 percent to a rate of 700,000 from the 676,000 originally reported for the previous month.
With the much bigger than expected increase, new home sales continued to rebound after falling to the lowest annual rate in well over a year in April and reached their highest level since July of 2007.
Computer hardware stocks are turning in some of the market's worst performances in morning trading, dragging the NYSE Arca Computer Hardware Index down by 1.9 percent. The index reached a five-month intraday high on Thursday before pulling back sharply.
Substantial weakness has also emerged among airline stocks, as reflected by the1.8 percent slump by the NYSE Arca Airline Index.
Biotechnology and semiconductor stocks are also seeing considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.
On the other hand, gold stocks have moved sharply higher over the course of the morning, driving the NYSE Arca Gold Bugs Index up by 2.9 percent.
Gold stocks are rebounding from the sell-off seen in the previous session, which came despite a spike by the price of the precious metal. Gold for August delivery is currently climbing $10.10 to $1,900.10 an ounce.
In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday, with the Japanese markets still closed for a holiday. China's Shanghai Composite Index plummeted by 3.9 percent, while Hong Kong's Hang Seng Index sank by 2.2 percent.
The major European markets have also shown significant moves to the downside on the day. While the German DAX Index has tumbled by 1.7 percent, the French CAC 40 Index is down by 1.4 percent and the U.K.'s FTSE 100 Index is down by 1.2 percent.
In the bond market, treasuries are turning in a lackluster performance after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 0.587 percent.
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