Stocks Close Firmly Positive, Major Averages At New Highs - U.S. Commentary

(RTTNews) - Extending the upward trend seen over the past several weeks, stocks moved mostly higher during trading on Friday. With the advance, all three of the major averages once again ended the session at record closing highs.

The major averages finished the day firmly in positive territory. The Dow advanced 142.04 points or 0.7 percent to 19,756.85, the Nasdaq rose 27.14 points or 0.5 percent to 5,444.50 and the S&P 500 climbed 13.34 points or 0.6 percent to 2,259.53.

For the week, the Nasdaq surged up by 3.6 percent, while the Dow and the S&P 500 both jumped by 3.1 percent.

The strength on Wall Street reflected a continuation of the upward momentum seen following President-elect Donald Trump's surprise victory in last month's elections.

Reflecting the optimism about Trump being in the White House, the University of Michigan released a report showing a much bigger than expected improvement in consumer sentiment in the month of December.

The University of Michigan said the preliminary reading on its consumer sentiment index for December came in at 98.0 compared to the final November reading of 93.8. Economists had expected the index to inch up to 94.1.

"Consumer confidence surged in early December to just one-tenth of an Index point below the 2015 peak—which was the highest level since the start of 2004," said Richard Curtin, the survey's chief economist. "The surge was largely due to consumers' initial reactions to Trump's surprise victory."

He added, "When asked what news they had heard of recent economic developments, more consumers spontaneously mentioned the expected positive impact of new economic policies than ever before recorded in the long history of the surveys."

Nonetheless, trading activity was somewhat subdued as traders looked ahead to next week's Federal Reserve announcement.

Following a two-day meeting of the Federal Open Market Committee, the Fed is scheduled to announce its monetary policy decision next Wednesday.

The Fed is widely expected to raise interest rates by a quarter point, reflecting the first rate hike by the central bank in a year.

Sector News

Pharmaceutical stocks saw substantial strength on the day, driving the NYSE Arca Pharmaceutical Index up by 1.9 percent. The index rebounded following recent weakness.

Bristol-Myers Squibb (BMY) posted a standout gain after raising its quarterly dividend by 2.6 percent to $0.39 per share.

Significant strength also emerged among airline stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Airline Index. With the gain, the index reached a fourteen-year closing high.

On the other hand, gold stocks moved sharply lower, dragging the NYSE Arca Gold Bugs Index down by 4.1 percent. The weakness in the sector came as gold for February delivery fell $10.50 to $1,161.90 an ounce.

Steel and trucking stocks also came under pressure on the day, giving back some ground after moving notably higher in recent weeks.

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 surged up by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index rose by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries moved notably lower ahead of next week's Fed meeting. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.7 basis points to 2.464 percent.

Looking Ahead

The Fed is likely to be in the spotlight next week, although reports on retail sales, industrial production, and inflation may also attract attention as traders look for clues about the central bank's next move.

On the earnings front, software giants Adobe Systems (ADBE) and Oracle (ORCL) are due to release their quarterly results after the close of trading next Thursday.