U.S. Stocks Lack Direction Ahead Of Next Week's Fed Meeting

Stocks have shown a lack of direction over the course of morning trading on Friday, with the major averages bouncing back and forth across the unchanged line following the starkly mixed performance seen in the previous session.

Currently, the major averages are narrowly mixed. While the Nasdaq is down 6.61 points or 0.1 percent at 14,056.70, the S&P 500 is up 8.16 points or 0.2 percent at 4,543.03 and the Dow is up 76.18 points or 0.2 percent at 35,301.36.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the Federal Reserve’s highly anticipated monetary policy meeting next week.

With the Fed widely expected to raise interest rates by another 25 basis point, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent encouraging inflation data has led to optimism next week’s rate hike will be the last, and traders will be looking for confirmation from the Fed.

A lack of major U.S. economic data may also be keeping traders on the sidelines following the release of several key reports earlier in the week.

Among individual stocks, shares of American Express (AXP) have moved sharply after the credit card giant reported better than expected second quarter earnings but weaker than expected revenues.

Railroad operator CSX Corp. (CSX) has also come under pressure after reporting second quarter revenues that fell short of expectations.

Meanwhile, shares of Scholastic (SCHL) have surged after the publisher reported better than expected fiscal fourth quarter earnings and increased its stock repurchase by $100 million.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Interest rate-sensitive utilities stocks have shown a notable move to the upside, however, with the Dow Jones Utility Average climbing by 1.1 percent to a two-month intraday high.

Healthcare and oil stocks are also seeing some strength on the day, while banking stocks are giving back ground following recent strength.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.6 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.2 percent, the U.K.’s FTSE 100 Index is up by 0.2 percent and the French CAC 40 Index is up by 0.5 percent.

In the bond market, treasuries are regaining ground after moving sharply lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 3.829 percent.

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