U.S. Stocks Lack Direction As Traders Look Ahead To Fed Meeting

Following the rally seen in the previous session, stocks have shown a lack of direction over the course of trading on Friday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 11.09 points or 0.1 percent at 12,131.15, the S&P 500 is up 10.21 points or 0.3 percent at 4,145.56 and the Dow is up 119.41 points or 0.4 percent at 33,945.57.

The choppy trading on Wall Street comes as traders look ahead to the Federal Reserve’s monetary policy meeting scheduled for next week.

Ahead of the meeting, CME Group’s FedWatch Tool is indicating an 85.4 percent chance the Fed will raise rates by another 25 basis points.

The Commerce Department released a report this morning that included readings on consumer price inflation that are said to be preferred by the Fed.

The report said the annual rate of consumer price growth slowed to 4.2 percent in March from a revised 5.1 percent in February.

Economists had expected the rate of growth to slow to 4.6 percent from the 5.0 percent originally reported for the previous month.

The annual rate of growth by core consumer prices, which exclude food and energy prices, also slipped to 4.6 percent in March from a revised 4.7 percent in February.

Economists had expected the rate of growth to slow to 4.5 percent from the 4.6 percent originally reported for the previous month.

Despite the slowdown, FHN Financial Chief Economist Chris Low noted, “Prices are still rising faster than the Fed is comfortable with.”

“The FOMC will hike another quarter-point next Wednesday, and may indicate further hikes remain a possibility,” Low said.

Traders are also digesting the latest earnings news, with shares of Amazon (AMZN) tumbling by 4.4 percent, as the company’s better than expected first quarter earnings and revenue are being overshadowed by concerns about slowing growth for its Amazon Web Services cloud computing platform.

Shares of Snap (SNAP) are also moving sharply lower after the Snapchat parent reported first quarter revenue that fell short of expectations.

On the other hand, shares of Intel (INTC) have surged after the semiconductor giant reported a narrower than expected adjusted first quarter loss.

While most of the major sectors are showing only modest moves, airline stocks have moved sharply higher, with the NYSE Arca Airline Index soaring by 4.0 percent.

SkyWest (SKYW) has helped lead the sector higher, skyrocketing by 19.5 percent after reporting a narrower than expected first quarter loss on revenues that exceeded analyst estimates.

Energy and banking stocks are also seeing notable strength, while the negative reaction to Amazon’s results is weighing on the retail sector.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index shot up by 1.4 percent, while China’s Shanghai Composite Index advanced by 1.1 percent.

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

In the bond market, treasuries are regaining ground after moving notably lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.8 basis points at 3.450 percent.

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