(RTTNews) - Stocks are showing a lack of direction during early afternoon trading on Friday after spending most of the morning in positive territory. The uncertainty comes as investors bring their focus back to a mixed bag of corporate news and a continued bleak outlook for the global economy.

With little in the way of economic news, investors are focused on corporate news and comments from Richmond Federal Reserve President Jeffrey Lacker.

Speaking at the Tech Council of Maryland, Lacker struck a relatively hopeful tone in the midst of what is shaping up to be the worst economic crisis since the Great Depression.

“Looking ahead, many analysts expect the U.S. economy to regain positive momentum sometime in 2009. That strikes me as a reasonable expectation, for several reasons,” said Lacker, noting that monetary policy is now “quite stimulative” and that the major shocks that dampened economic activity this past year have subsided already.

On the corporate front, Citigroup (C) is exploring the possibility of selling parts of the company or an outright sale following the plunge in its stock price, the Wall Street Journal reported Thursday, citing people familiar with the matter.

According to the report in the Wall Street Journal, internal discussions at Citigroup are at a preliminary stage and do not imply that Citigroup’s board and management have backed down from their stance that the company has ample funding, capital and strategic direction.

The report said that the company’s board of directors is slated to have a formal meeting on Friday to explore the options.

In other news, President Bush signed into a law an extension of unemployment relief in an attempt to help people laid off during the current economic turmoil. The law extends emergency unemployment compensation to 20 weeks and creates a second tier of 13 weeks of compensation for people in states with high unemployment rates.

The bill, which cleared the House in October, received the blessing of the Senate Thursday evening after the White House removed a veto threat that had bottled up the legislation. The Senate approved the bill on a voice vote after 89 senators voted to cut off debate in a procedural motion.

Bush’s signing of the law came a day after government data indicated that initial claims for unemployment benefits had jumped to a 16-year high last week.

In recent trading, the major averages have been bouncing back and forth across the flat-line and are currently posting gains. The Dow is currently up 54.24 at 7,606.53, the Nasdaq is up 2.93 at 1,319.05 and the S&P 500 is up 3.67 at 756.11.

Sector News

Despite the uncertainty in the broader markets, steel stocks are seeing considerable strength, with the Amex Steel Index up 8.8 percent. With the gain, the index is bouncing well off the all-time closing low that it set in the previous session.

Within the steel sector, one of the best performers is Cliffs Natural Resources (CLF), which is climbing off of the more than three-year closing low it set during the previous session. Currently, the stock is up 17.3 percent.

Other resource stocks also continue to post substantial gains, with significant strength visible among gold stocks. The Amex Gold Bugs Index is currently up 18.5 percent, as gold for December delivery is currently up $48 at $796.70 an ounce.

Notable gains are also being posted by software, utilities, and internet stocks. Among software stocks, shares of Microsoft (MSFT) are currently up 6.9 percent after Oppenheimer upgraded its rating on the software giant to Outperform from Perform.

Meanwhile, banking stocks are suffering massive losses on the day, led by a 10 percent decline by Citigroup (C). At its low for the session, Citigroup was at its worst intraday level in fifteen years.

Currently, health insurance and biotech stocks are also suffering notable losses, with the Morgan Stanley Healthcare Payor Index down 2.2 percent while the Amex Biotechnology Index is down 3.6 percent. Other significant losses are showing up in the housing, real estate, railroad, and pharmaceutical sectors.

Stocks In The News

Among individual stocks, Foot Locker Inc. (FL) is down 29.2 percent on the day after the company reported adjusted third quarter net income of $0.18 per share, compared to $0.21 per share in last year. With the considerable decline, the stock fell below support and to its lowest trading level in over nine and a half years.

Sales for the quarter fell to $1.31 billion, as third quarter comparable-store sales decreased 1.7%. Analysts polled by First Call/Thomson Financial expected the company to earn $0.25 per share for the quarter on revenue of $1.35 billion.

KeyCorp (KEY) is also posting a substantial loss during Friday’s trading after the company reduced its regular cash dividend by two-thirds to improve the company’s capital position during the current economic turmoil. Currently, shares of KeyCorp are down 24.6 percent on the day.

At the other end of the spectrum, Gap (GPS) is posting a gain of 18.3 percent after the company reported third quarter net income of $0.35 per share on net sales of $3.6 billion. Analysts expected the apparel retailer to earn $0.34 per share for the quarter on revenues of $3.57 billion. Gap also reaffirmed that it expects full year GAAP earnings in line with expectations.

Other Markets

In overseas trading, the stock markets in the Asia-Pacific region closed notably higher on Friday, ending a four-day losing streak. Japan’s benchmark Nikkei 225 index ended the session with a gain of 2.7 percent.

Meanwhile, the major European markets closed posting notable losses despite showing earlier strength. The French CAC 40 Index and the German DAX Index ended the day down 3.3 percent and 2.2 percent, respectively, while the U.K.’s FTSE 100 Index posted a loss of 2.5 percent.

In the bond markets, treasuries are seeing significant weakness, falling to new lows for the session in recent trading. Subsequently, the yield on the benchmark ten-year note is currently up 10.9 basis points at 3.253 percent.

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

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