(RTTNews) - Stocks are once again experiencing significant volatility in morning trading on Friday, with the markets having difficulty sustaining any significant moves. The major averages are showing big swings, as was the case in the previous session.

The major averages fell sharply at the start of trading, as traders reacted negatively to a report from the Commerce Department showing that housing starts fell to a new seventeen-year low in the month of September.

The report showed that housing starts fell 6.3 percent to an annual rate of 817,000 in September from the revised August rate of 872,000. Economists had expected starts to fall to 870,000 from the 895,000 originally reported for the previous month.

With the monthly decrease, housing starts fell to their lowest level since January of 1991. Starts in September were down 31.1 percent compared to the same month last year.

Nonetheless, while Peter Boockvar of Miller Tabak acknowledged that the data is not a good sign for GDP, he said, “It is exactly what is needed for the long term benefit of the housing industry in light of current inventory levels that are twice what is normal.”

Stocks were unable to sustain the initial downward move, however, with positive earnings news from companies such as IBM (IBM), Google (GOOG), and Honeywell (HON) helping to keep selling pressure somewhat subdued.

In other news, President Bush spoke before the U.S. Chamber of Commerce on Friday, addressing the financial turmoil and the series of government actions taken to boost confidence and restore functioning to strained markets.

“Our nation is dealing with a serious financial crisis,” Bush said, noting that Americans are worried about the future of the economy.

Many are also concerned about how the massive government intervention, which Bush referred to as “extraordinary,” will affect the future of the free market. Bush addressed these concerns, saying that while he is a proponent of free markets, the action was absolutely necessary.

While the major averages staged a notable recovery attempt not long after the open, they have moved back to the downside since then. The Dow is currently down 64.28 at 8,914.98, the Nasdaq is down 6.01 at 1,711.70 and the S&P 500 is down 5.68 at 940.75.

Sector News

Commodity stocks are showing some of the widest losses of the session, with significant weakness visible among gold socks. A continued decline in the price of gold has driven the Amex Gold Bugs Index down 3.4 percent. Currently, the price of gold is down over $28 an ounce.

Despite rising crude oil prices, oil services stocks are also suffering wide losses. Led by a decline of 8 percent by Baker Hughes (BHI), the Philadelphia Oil Services Sector Index is down 3.9 percent. The index is currently poised to set a new three-year closing low.

Housing stocks are also showing significant losses following the release of the housing starts report. Considerable weakness is also visible in the defense, computer hardware, and banking sectors, although most of the major sector indices have moved well off their lows.

Meanwhile, natural gas and airline stocks are posting notable gains, with the Amex Natural Gas Index and the Amex Airline Index currently up 1.5 percent and 1 percent, respectively.

Stocks Being Driven By Analyst Comments

Despite the weakness in the broader markets, shares of Badger Meter (BMI) have shown a strong upward move after falling sharply in recent sessions. Badger Meter is currently up 3.4 percent after ending the previous session at a nearly two-year closing low.

The gain by Badger Meter comes after Robert W. Baird upgraded its rating on the manufacturer of flow measurement and control products to Outperform from Underperform. At the same time, Robert W. Baird lowered its price target for Badger Meter to $30 from $43.

Shares of Juniper Networks (JNPR) are also bucking the downtrend by the broader markets after UBS upgraded its rating on the networking company to Buy from Neutral. Juniper is currently up 5.4 percent, moving further off the two-year closing low it set on Wednesday.

On the other hand, shares of SunPower (SPWRA) are currently down 6.1 percent after Citigroup downgraded its rating on the solar power products maker to Sell from Hold. Citigroup said inventory risk could result in a big miss for SunPower in the first quarter.

Other Markets

In overseas trading, the stocks markets in the Asia-Pacific region turned in a mixed performance on Friday. While notable weakness was visible among stocks in Hong Kong, South Korea, and Australia, Japanese and Chinese stocks ended the day mostly higher.

Meanwhile, the major European markets are all advancing, regaining some ground after falling sharply on Thursday. The French CAC 40 Index and the German DAX Index are up 1.9 percent and 2.1 percent, respectively, while the U.K.’s FTSE 100 Index posting a 3.2 percent gain.

In the bond market, treasuries have shown a lack of direction over the course of the morning, with the benchmark ten-year note currently nearly unchanged. Subsequently, the yield on the ten-year note is currently up less than a basis point at 3.939 percent.

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Posted in Categories: Australia, Economy, Eurozone, Japan, Releases, USA.

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