Stocks Close Mixed Following Volatile Trading Day - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Friday before eventually ending the session mixed. The choppy trading came amid renewed geopolitical concerns as well as the release of a mixed batch of U.S. economic data.

The major averages ended the day on opposite sides of the unchanged line. While the Nasdaq rose 11.92 points or 0.3 percent to 4,464.93, the Dow fell 50.67 points or 0.3 percent to 1,662.91. The S&P 500 closed nearly flat, down just 0.12 points at 1,955.06.

For the week, the major averages all moved to the upside. The Nasdaq surged up by 2.2 percent, the S&P 500 jumped by 1.2 percent and the Dow advanced by 0.7 percent.

The volatility on the day was largely due to reports that Ukrainian forces attacked and partially destroyed a column of Russian armored personnel carriers that had crossed the border.

Andriy Lysenko, a spokesman for the Ukrainian military, told reporters that Ukrainian troops engaged the vehicles after they were spotted crossing a rebel-held section of the border under cover of darkness.

However, the Russian government denied the claims that its forces have crossed the border and has accused the Ukrainian government of trying to block efforts to provide humanitarian aid.

Traders were also presented with a mixed batch of U.S. economic data, including tame inflation data from the Labor Department.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in July after climbing by 0.4 percent in June. The modest increase by the index matched economist estimates.

Excluding food and energy prices, core producer prices rose by 0.2 percent in July, matching economist estimates as well as the increase seen in the previous month.

The modest price growth offset some of the recent concerns about inflation and its potential impact on the outlook for monetary policy.

Chris Low, chief economist at FTN Financial, said, "Two months of low inflation should dampen concern the Fed needs to raise rates soon."

A separate report from the Federal Reserve showed a slightly bigger than expected increase in industrial production in July, while a report from Thomson Reuters and the University of Michigan showed an unexpected deterioration in consumer sentiment in August.

Sector News

Reflecting the lackluster close by the broader markets, most of the major sectors ended the day showing only modest moves.

Considerable strength was visible among natural gas stocks, however, with the NYSE Arca Natural Gas Index climbing by 1.1 percent. Ultra Petroleum (UPL) posted a standout gain, surging up by 6 percent.

Notable strength was also visible among semiconductor stocks, as reflected by the 1 percent gain posted by the Philadelphia Semiconductor Index. Applied Materials (AMAT) led the sector higher after reporting better than expected third quarter earnings.

Oil service stocks also saw some strength on the day amid a rebound by the price of crude oil, while gold and retail stocks moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index inched up by less than a tenth of a percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.

Meanwhile, the major European markets came under pressure on the news from Ukraine, ending the day mixed. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index tumbled by 1.4 percent and the French CAC 40 Index dropped by 0.7 percent.

In the bond market, treasuries moved notably higher amid the renewed geopolitical concerns. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to a new one-year closing low of 2.345 percent.

Looking Ahead

While developments overseas are likely to remain in focus next week, trading could also be impacted by the release of reports on consumer price inflation, housing starts, and existing home sales.

Traders are also likely to keep an eye on the minute of the latest Fed meeting, looking for indications regarding the outlook for monetary policy.

Additionally, Hewlett-Packard (HPQ), Home Depot (HD), Lowe's (LOW), Target (TGT) and Gap (GPS) are among the companies due to report their quarterly results next week.