Stocks Close Lower On The Day But Sharply Higher For The Year - U.S. Commentary

(RTTNews) - After moving modestly higher over the two previous sessions, stocks moved back to the downside during trading on Friday. The major averages slid into negative territory, although selling pressure was somewhat subdued.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow dropped 118.29 points or 0.5 percent to 24,719.22, the Nasdaq slid 46.77 points or 0.7 percent to 6,903.39 and the S&P 500 fell 13.93 points or 0.5 percent to 2,673.61.

Despite the pullback on the day, the major averages moved sharply higher for the year. While the Dow surged up by 25.1 percent, the Nasdaq spiked by 28.2 percent and the S&P 500 jumped by 19.4 percent.

Stocks frequently benefit from so-called window dressing on the last day of the year, but investors may have decided to do some profit taking following the strong upward move seen in 2017.

Trading activity remained light, however, with many traders likely looking to get a head start on the New Year's weekend. A quiet day on the U.S. economic front also kept traders on the sidelines.

Most of the major sectors showed only modest moves on the day, although significant weakness was visible among networking stocks.

The NYSE Networking Index slumped by 2 percent after ending the previous session at its best closing level in over sixteen years.

ADTRAN (ADTN) led the networking sector lower, tumbling by 13 percent after providing disappointing fourth quarter guidance.

Biotechnology, semiconductor, and electronic storage stocks also moved to the downside, weighing on the tech-heavy Nasdaq.

On the other hand oil service stocks saw some strength on the day, moving higher along with the price of crude oil, which closed above $60 a barrel for the first time in over two years.

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 0.1 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index advanced by 0.9 percent, the French CAC 40 Index and the German DAX Index both dropped by 0.5 percent.

In the bond market, treasuries moved back to the upside following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 2.405 percent.

Looking Ahead

The economic calendar for next week starts off relatively quiet, although the closely watched monthly jobs report is likely to attract considerable attention next Friday.

Traders are also likely to keep an eye on reports on manufacturing and service sector activity, construction spending, private sector employment, international trade, and factory orders.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting next Wednesday, potentially shedding light on the outlook for interest rates in the new year.