Stocks showed a lack of direction over the course of the trading session on Friday, with the major averages bouncing back and forth across the unchanged line after failing to sustain an initial move to the upside.
The major averages eventually ended the day narrowly mixed. While the Nasdaq inched up 10.01 points or 0.1 percent to a new record closing high of 20,895.66, the S&P 500 (SPI:SP500) edged down 0.57 points or less than a tenth of a percent to 6,296.79 and the Dow fell 142.30 points or 0.3 percent to 44,342.19.
For the week, the Nasdaq jumped by 1.5 percent and the S&P 500 climbed by 0.6 percent, but the Dow slipped by 0.1 percent.
The initial strength on Wall Street came as stocks continued to benefit from Thursday’s upbeat U.S. economic data, which helped ease concerns about the impact of President Donald Trump’s trade wars.
Buying interest waned shortly after the start of trading, however, leading to some profit taking after the Nasdaq and the S&P 500 reached new record intraday highs.
The subsequent pullback also came amid a slump by shares of Netflix (NASDAQ:NFLX), with the streaming giant tumbling by 5.1 percent to its lowest closing level in over a month.
The drop by Netflix came after the company reported better than expected second quarter results but warned its operating margin in the second half will be lower than the first half.
Shares of American Express (NYSE:AXP) and 3M (NYSE:MMM) also showed notable moves to the downside even though the companies reported second quarter results that exceeded estimates.
Meanwhile, traders largely shrugged off a report from the University of Michigan showing a modest improvement by U.S. consumer sentiment in the month of July.
The University of Michigan said its consumer sentiment index climbed to 61.8 in July after surging to 60.7 in June. Economists had expected the index to rise to 61.5.
With the slightly bigger than expected increase, the consumer sentiment index reached its highest level since hitting 64.7 in February.
Sector News
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Utilities stocks showed a strong move to the upside, however, with the Dow Jones Utilities Average climbing by 1.6 percent to its best closing level in over seven months.
Considerable strength was also visible among brokerage stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Securities Broker/Dealer Index.
Interactive Brokers (IBKR) helped lead the sector higher, surging by 7.8 percent after reporting better than expected second quarter results.
On the other hand, biotechnology stocks came under pressure over the course of the session, dragging the NYSE Arca Biotechnology Index down by 2.2 percent.
Airline and oil service stocks also showed notable moves to the downside on the day, offsetting the strength in the aforementioned sectors.
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 increased by 0.5 percent.
The major European markets also ended the day mixed. While the German DAX Index fell by 0.3 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.’s FTSE 100 Index rose by 0.2 percent.
In the bond market, treasuries moved to the upside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.1 basis points to 4.432 percent.
Looking Ahead
Earnings news may move into the spotlight next week, with a slew of big-name companies scheduled to report their quarterly results. Traders are also likely to keep an eye on reports on new and existing home sales and durable goods orders.
SOURCE: RTTNEWS