U.S. Stocks Seeing Modest Weakness Amid Light Trading

Stocks have moved modestly lower in morning trading on Friday, giving back some ground after trending higher in recent sessions. The major averages have pulled back off Wednesday’s record closing highs, although selling pressure has remained somewhat subdued.

Currently, the major averages are off their lows of the session but stuck in the red. The Dow is down 61.59 points or 0.2 percent at 28,102.41, the Nasdaq is down 8.93 points or 0.1 percent at 8,696.25 and the S&P 500 is down 4.85 points or 0.2 percent at 3,148.78.

The modest weakness on Wall Street comes amid concerns rising tensions between the U.S. and China over the situation in Hong Kong could impact ongoing trade talks.

After President Donald Trump signed two bills in support of pro-democracy protesters in Hong Kong, a spokesman for China’s Foreign Ministry threatened strong countermeasures.

Foreign Ministry spokesman Geng Shuang accused the U.S. of interfering in China’s internal affairs and violating international law and the basic norms governing international relations.

“China will take strong counter-measures in response to the U.S. behavior that interferes in China’s internal affairs and undermines China’s interests,” Geng said.

“No one shall underestimate China’s determination in safeguarding national sovereignty, security and development interests,” he added. “Nor shall they misjudge China’s resolve in implementing the ‘one country, two systems’ principle and in upholding prosperity and stability in Hong Kong.”

With a fresh round of protests expected over the weekend, the dispute over the situation in Hong Kong could potentially derail the long-awaited phase one trade deal.

Trading activity has remained relatively light, however, with many traders still away from their desks following the Thanksgiving Day holiday on Thursday.

A lack of major U.S. economic data is also keeping some traders on the sidelines along with an early close for the markets, with trading set to end at 1 pm ET.

Oil service stocks have shown a significant move to the downside in morning trading, dragging the Philadelphia Oil Service Index down by 1.9 percent.

The weakness among oil service stocks comes amid a steep drop by the price of crude oil, with crude for January delivery plunging $1.92 to $56.19 a barrel.

Natural gas and steel stocks have also come under pressure on the day, while gold stocks have moved sharply higher amid an increase by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index fell by 0.5 percent, while Hong Kong’s Hang Seng Index plunged by 2 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index has slid by 0.6 percent, the French CAC 40 Index and the German DAX Index are both just above the unchanged line.

In the bond market, treasuries are extending the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 1.795 percent.

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