After moving notably higher over the past several sessions, stocks turned in a relatively lackluster performance during trading on Friday. Despite the choppy trading, the Dow reached another new record closing high.
The Dow edged up 56.81 points or 0.2 percent to 37,305.16, closing higher for the seventh consecutive session. The Nasdaq also climbed 52.36 points or 0.4 percent to a nearly two-year closing high of 14,813.92, while the S&P 500 edged down 0.36 points or less than a tenth of a percent to 4,719.19.
The major averages all closed higher for the seventh consecutive week. While the Dow and the Nasdaq both surged by 2.9 percent, the S&P 500 jumped by 2.5 percent.
The choppy trading on Wall Street came as traders took a breather following the recent upward move by the markets.
Optimism about the outlook for interest rates has contributed to the recent strength on Wall Street, although hopes for near-term interest rate cuts were partly offset by comments from New York Federal Reserve President John Williams.
Williams told CNBC’s “Squawk Box” the Fed is not “really talking about rate cuts right now” and is focused on whether monetary policy is sufficiently restrictive to ensure inflation comes back down to 2 percent.
Nonetheless, the chances of a quarter point rate cut in March have jumped to 62.4 percent, according to CME Group’s FedWatch Tool.
On the U.S. economic front, the Federal Reserve released a report showing a modest rebound in U.S. industrial production in the month of November.
The report said industrial production rose by 0.2 percent in November after slumping by a downwardly revised 0.9 percent in October.
Economists had expected industrial production to climb by 0.3 percent compared to the 0.6 percent decrease originally reported for the previous month.
The rebound in industrial production came as manufacturing output increased by 0.3 percent in November after plunging by 1.2 percent in October following the resolution of strikes at several major automakers.
Sector News
Housing stocks gave back ground after moving sharply higher over the past few sessions, with the Philadelphia Housing Sector Index falling by 1.9 percent after ending Thursday’s trading at a record closing high.
Significant weakness was also visible among utilities stocks, as reflected by the 1.7 percent loss posted by the Dow Jones Utility Average.
Commercial real estate, brokerage and natural gas stocks also saw notable weakness, while software stocks showed a strong move to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Hong Kong’s Hang Seng Index soared by 2.4 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index rose by 0.3 percent, the German DAX Index closed nearly unchanged and the U.K.’s FTSE 100 Index slumped by 1.0 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.928 percent.
Looking Ahead
Reaction to reports on personal income and spending, durable goods orders, housing starts and new and existing home sales may impact next week’s trading.
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