U.S. Stocks Close Mixed On The Day But Lower For The Week

The major U.S. stock indexes fluctuated over the course of the trading day on Friday before ending the session mixed. While the Dow showed a notable move to the downside, the tech-heavy Nasdaq bounced off a three-month closing low.

The major averages finished the day on opposite sides of the unchanged line. The Dow fell 201.81 points or 0.6 percent to 35,911.91, but the Nasdaq climbed 86.94 points or 0.6 percent to 14,893.75 and the S&P 500 inched up 3.82 points or 0.1 percent to 4,662.85.

Despite the mixed performance on the day, the major averages all moved lower for the week. The Dow slid by 0.9 percent, while the Nasdaq and the S&P 500 both dipped by 0.3 percent.

A steep drop by JPMorgan Chase (JPM) weighed on the Dow, with the financial giant tumbling by 6.2 percent despite reporting better than expected fourth quarter earnings.

Citigroup (C) also moved lower after reporting a significant decrease in fourth quarter profits, while Wells Fargo (WFC) moved notable higher after reporting fourth quarter results that beat estimates on both the top and bottom lines.

The overall volatility on Wall Street came as traders reacted to a slew of U.S. economic data, including a Commerce Department report unexpectedly showing a steep drop in U.S. retail sales in the month of December.

The Commerce Department said retail sales tumbled by 1.9 percent in December after edging up by a revised 0.2 percent in November.

The sharp pullback surprised economists, who had expected retail sales to come in unchanged compared to the 0.3 percent growth originally reported for the previous month.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the unexpected slump in retail sales appears to mainly reflect the ongoing impact of higher prices and supply shortages.

Inflation concerns have also contributed to a bigger than expected drop in U.S. consumer sentiment in the month of January, according to preliminary data released by the University of Michigan on Friday.

The report showed the consumer sentiment index fell to 68.8 in January from 70.6 in December. Economist had expected the index to edge down to 70.0.

The Federal Reserve also released a report unexpectedly showing a modest decrease in U.S. industrial production in the month of December.

The Fed said industrial production edged down by 0.1 percent in December after climbing by an upwardly revised 0.7 percent in November.

Economists had expected industrial production to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Sector News

Energy stocks showed a substantial move to the upside on the day, benefiting from a sharp increase by the price of crude oil.

With crude for February delivery surging $1.70 or 2 percent to $83.82 a barrel, the Philadelphia Oil Service Index soared by 3.8 percent and the NYSE Arca Oil Index spiked by 2.6 percent.

Semiconductor stocks also showed a significant rebound after falling sharply on Thursday, driving the Philadelphia Semiconductor Index up by 2.3 percent.

On the other hand, housing stocks saw considerable weakness on the day, dragging the Philadelphia Housing Sector Index down by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved significantly lower during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.3 percent, while China’s Shanghai Composite Index slumped by 1 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.3 percent, the German DAX Index and the French CAC 40 Index slid by 0.8 percent and 0.9 percent, respectively.

In the bond market, treasuries showed a notable pullback after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.1 basis points to 1.772 percent.

Looking Ahead

Following the long holiday weekend, next week’s trading may be impacted by reaction to reports on housing starts, existing home sales and regional manufacturing activity.

Earnings season also starts to pick up steam next week, with Goldman Sachs (GS), Bank of America (BAC), Morgan Stanley (MS), Procter & Gamble (PG), Travelers (TRV), and Netflix (NFLX) among the companies due to report their quarterly results.

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