US midday: Stocks recover from early losses

Stocks have moved into the black in another volatile session thus far, albeit less than on Thursday, with traders already looking out to the following week's release of consumer price data for January as a potentially key event.

Analysts at both Deutsche Bank and Bank of America-Merrill Lynch noted the potential importance for financial markets of the next set of CPI figures due out on 14 February.

In a research note sent to clients, the latter pointed out how: "Markets stop panicking when central banks start panicking...Fed has become "buyer of [volatility]" [...] markets stop panicking when central banks start panicking"...late-cycle crash/correction in 1987, 1998, 2016 all arrested by policy actions."

2,540 on the S&P 500 and 3.0% yields on the benchmark 10-year US Treasury would likely represent "good entry points in coming weeks", they added.

Nonetheless, in a separate note they wrote: "Stress-testing the Fed: The US equity market is seemingly waking up to the idea that we are in a higher rate environment amid rising inflation and steady Fed hikes.

"The equity market sell-off thus far does not alter our outlook for the US economy or monetary policy. However, if it turns into a sustained and broad-based deterioration of financial conditions, it would be a cause of concern."

At 1915 GMT, the Dow Jones Industrial Average was off its intraday lows of 23,373.22, and adding 0.13% to 23,888.28, alongside 0.34% rise for the S&P 500 to 2,591.46 and an advance of 0.25% for the Nasdaq Composite to 6,794.11.

Meanwhile, the Chicago Board of Options Exchange's VIX volatility index was off an intra-day high of 41.06 and down by 1.05% 33.11.

On Thursday, stocks in the US tumbled again as worries about rising inflation and higher interest rates continued to plague investors. The Dow ended down 1,033 points, while the S&P 500 fell 101 points and the Nasdaq sank 275 points.

Investors were also be digesting news that US lawmakers voted to pass a two-year budget that will boost government spending by $300bn. The US government officially shut down for the second time this year earlier as Congress had failed to meet the midnight on Thursday deadline to vote on the new budget. However, with the measures now passed by both the Senate and the House, the shutdown could end before the working day begins.

In corporate news, FedEx and UPS took a beating following reports that Amazon was preparing to launch a delivery service for businesses that would pit it against the two companies.

Teva Pharmaceuticals shares dipped in pre-market trade after it warned that 2018 results would be weaker-than-expected this year despite aggressive cost-cutting.

Sharpie pens maker Newell Brands was also in focus, after saying that activist investors Starboard Value LP and Opportunity Master Fund were looking to nominate 10 directors to its board.

Elsewhere, shares in GrubHub were sliding lower despite the company announcing a partnership with Yum Brands a day earlier.