Following the lackluster performance seen in recent sessions, stocks fluctuated over the course of the trading session on Friday before ending the day mostly lower.
The major averages showed a lack of direction in early trading but slid more firmly into negative territory as the session progressed.
Despite an afternoon recovery attempt, the major averages all finished the day in the red. The Dow edged down 20.56 points or 0.1 percent to 37,689.54, the Nasdaq slid 83.78 points or 0.6 percent at 15,011.35 and the S&P 500 fell 13.52 points or 0.3 percent to 4,769.83.
The major averages still posted substantial gains for the year. The Nasdaq skyrocketed by 43.4 percent, the S&P 500 soared by 24.2 percent and the Dow surged by 13.7 percent.
The lower close on Wall Street may partly have reflected profit taking, as some traders looked to cash in on the recent strength in the markets.
Traders previously seemed hesitant to cash in on the recent gains amid concerns about missing out on further upside but apparently decided the final trading day of the year was the right time to lock in some profits.
Overall trading activity remained relatively subdued, however, with some traders looking to get a head start on New Year’s festivities.
Trading activity may pick back up next week, as the Labor Department is scheduled to release its closely watched monthly jobs report next Friday.
Reports on manufacturing and service sector activity may also attract attention along with the minutes of the latest Federal Reserve meeting.
In U.S. economic news, MNI Indicators released a report showing a substantial downturn by Chicago-area business activity in the month of December.
MNI Indicators said its Chicago business barometer tumbled to 46.9 in December from 55.8 in November, with a reading below 50 indicating contraction. Economists had expected the index to drop to 51.0.
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Sector News
Airline stocks showed a significant move to the downside on the day, dragging the NYSE Arca Airline Index down by 2.0 percent.
Considerable weakness also emerged among commercial real estate stocks, as reflected by the 1.2 percent loss posted by the Dow Jones U.S. Real Estate Index. The index ended Thursday’s trading at a ten-month closing high.
Oil service stocks also moved notably lower amid a modest decrease by the price of crude oil, while weakness was also visible among networking, computer hardware and steel stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index climbed by 0.7 percent.
Meanwhile, the major European markets all moved modestly higher on the day. While the German DAX Index rose by 0.3 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.
In the bond market, treasuries saw modest weakness, extending the pullback seen on Thursday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.6 basis points to 3.866 percent.
Looking Ahead
As mentioned above, the Labor Department’s monthly jobs report is likely to be in focus next week, with traders hoping for further evidence the Fed is likely to cut interest rates.
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