Stocks trade mixed Friday, in what has been a quiet week for the major market indices. Earnings season is dying down and there have been very few economic releases this week. However, hawkish comments from St. Louis Fed President Poole have been a bearish event Friday. The auto sector has benefited today from analyst upgrades of Ford (F), General Motors (GM) and Daimler Chrysler (DCX).
Shares of F and GM are higher in midday action after Deutsche Bank raised its rating on the two stocks to "Buy" from "Hold." DB feels that negotiations with the union over health care benefits will be positive. F shares are up more than three percent with GM shares up nearly seven percent. DCX was upgraded by Citigroup to "Buy" on the view the company will announce a restructuring plan for its U.S. division this next week. DCX shares are up nearly three percent.
Though oil prices have been flat this week, there still has been plenty of volatility. Crude has been trying to move through resistance near $60 all week. It seems the commodity might accomplish this feat today with crude currently trading at $60.15 after hitting an intraday high at $60.30. If this break holds, it could create concerns that could convince traders to take profits in stocks.
Inflation worries are in the spotlight today after Mr. Poole stated that inflation is still a major concern and that he hopes core inflation will move below 2.0 percent this year. Traders are looking for comments from Fed officials that point to a moderation in inflation and Mr. Poole didn't offer this view. This news also took a toll on Treasuries as well as stocks Friday. Traders are still waiting for comments from the Cleveland and Dallas Fed chiefs as well.
There has been a successful IPO today from hedge-fund operator Fortress Investment Group (FIG). The stock is up 70 percent in midday action and is the first hedge-fund to go public. FIG priced at the top of its range at $18.50 a share, bringing in $634 million for the company.
The chip sector is providing strength Friday after J.P. Morgan raised its rating on the entire semiconductor sector to "Bullish" from "Cautious." JP believes there are signals pointing to a bottom in the sector and that we should see improvement in the second quarter. The Philly Semiconductor Index ($SOX) is up three quarters of a percent on the news.
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