(RTTNews) - Stocks saw a sharp pullback on Friday, as a batch of mixed economic data raised questions regarding the economic recovery. The major averages all closed in negative territory by substantial margins, more than offsetting the strong gains posted in the previous session.

This morning, Reuters and the University of Michigan upwardly revised their reading on consumer sentiment in the month of October to 70.6, but the index still came in below the final reading of 73.5 in September.

Further, the Commerce Department reported that personal spending decreased in September, while personal income came in nearly unchanged, as meager conditions in the labor market continue to impact consumers’ bottom line.

Meanwhile, one of the few bright spots one the economic front came as the Institute for Supply Management - Chicago said that activity in the Chicago-area manufacturing sector unexpectedly expanded in the month of October.

The headline figure jumped to 54.2 in September from the previous month’s level of 46.1, reaching its highest level in over a year.

The major averages remained stuck firmly in the red going into the close, ending the session near their worst levels of the day. The Dow closed down by 249.85 points or 2.5 percent at 9,712.73, the Nasdaq fell by 52.44 points or 2.5 percent to 2,045.11 and the S&P 500 slipped by 29.92 points or 2.8 percent to 1,036.19.

With the sell-off on the day, the major averages all closed sharply lower for the week, adding to the modest losses posted last week. The Dow fell 2.6 percent for the week, while the Nasdaq and the S&P 500 posted weekly losses of 5.1 percent and 4 percent, respectively.

Sector News

Healthcare provider stocks saw some of the day’s most dismal performances, with the Morgan Stanley Healthcare Provider Index falling by 5.9 percent. The loss dragged the index down to its worst closing level in nearly one month’s time.

PharMerica (PMC) weighed heavily on the sector, posting a loss of 11 percent on the day, finishing the session at its worst price in seven months. The decline came as the firm’s third quarter revenues came in at $461.0 million, falling short of the expected $461.38 million.

Banking stocks also came under pressure, dragging down the Kbw Bank Index down by 5 percent. With the loss, the index ended the session at its worst closing level in nearly three months.

Natural gas, electronic storage, housing, airline, defense and biotechnology stocks also saw considerable weakness on the day, reflecting the broad based pullback in equities on the day.

Dow Components

Bank of America (BAC) led the Dow lower, retreating by 7.3 percent. Shares of the financial giant closed at their lowest price in three months.

General Electric (GE) and Home Depot (HD) also posted notable losses, falling by 4.1 percent and 3.2 percent, respectively. General Electric dipped to a seven and a half week closing low, while Home Depot finished at its lowest closing price in over three months.

Additionally, a considerable pullback by Travelers (TRV) pulled shares of the insurer down off of the seventeen-month closing high set on Thursday. The stock registered a loss of 4.1 percent, partially offsetting yesterday’s strong gain.

JP Morgan Chase (JPM), Alcoa (AA), American Express (AXP), Caterpillar (CAT), DuPont (DD) and United Technologies (UTX) were among other notable losers in the blue chip index, which saw all 30 of its components post losses on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region offset some of their recent losses on Friday. Japan’s benchmark Nikkei 225 Index rose by 1.5 percent on the day, while Hong Kong’s Hang Seng Index advanced by 2.3 percent.

Meanwhile, the major European markets ended the day with heavy losses. The U.K.’s FTSE 100 closed down by 1.8 percent, while the French CAC 40 Index and the German DAX Index fell by 2.9 percent and 3.1 percent, respectively.

In the bond markets, treasuries saw notable strength amid the pullback on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.392 percent, posting a loss of 10.9 basis points.

Looking Ahead

Looking ahead to next week, traders are likely to focus on the monthly jobs report due to be released on Friday. Ahead of the jobs report, traders may keep an eye on data on national manufacturing activity and pending home sales as well as the latest interest rate announcement from the Fed.

On the earnings front, quarterly results from Ford (F), Humana (HUM), Kraft (KFT), Viacom, (VIA) and Cisco (CSCO), among others, are also likely to attract attention.

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

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