Stocks Close Moderately Lower Amid Light Trading - U.S. Commentary

(RTTNews) - While trading activity was relatively subdued, stocks saw moderate weakness during trading on Friday. With the pullback on the day, the major averages largely offset the gains posted in the previous session.

The major averages ended the day firmly in the red but well off their worst levels of the day. The Dow fell 72.81 points or 0.5 percent to 15,425.51, the Nasdaq slipped 9.02 points or 0.3 percent to 3,660.11 and the S&P 500 dipped 6.06 points or 0.4 percent to 1,691.42.

For the week, the Nasdaq slid by 0.8 percent, while the Dow and the S&P 500 dropped by 1.5 percent and 1.1 percent, respectively.

The weakness on Wall Street partly reflected lingering concerns about the outlook for the Federal Reserve's asset purchase program.

The losses on the day extended the downward move seen earlier in the week, which was triggered in part by comments from Fed officials indicating that the central bank may start scaling back its stimulus program as early as September.

While economists have increasingly been predicting a September tapering, the remarks still generated negative sentiment among investors.

Traders were also cashing in on some of the recent strength in the markets, with the pullbacks by the Dow and the S&P 500 coming after they reached record highs last Friday.

On the economic front, the Commerce Department released a report showing an unexpected drop in wholesale inventories in the month of June.

The report showed that wholesale inventories dipped by 0.2 percent following a revised 0.6 percent decrease in May. The drop came as a surprise to economists, who had expected inventories to increase by about 0.4 percent.

Among individual stocks, shares of Dendreon (DNDN) fell sharply after the biotechnology company reported weaker than expected second quarter results and provided disappointing guidance for sales of its prostate cancer therapy Provenge.

For-profit educator DeVry (DV) also came under pressure after reporting a fourth quarter net loss compared to a year-ago profit. The company reported adjusted earnings that beat analyst estimates.

On the other hand, shares of BlackBerry (BBRY) moved notably higher after Reuters reported that the smartphone maker is considering going private.

Sector News

Airline stocks turned in some of the market's worst performances, dragging the NYSE Arca Airline Index down by 1.3 percent. With the loss, the index fell to its lowest closing level in almost a month.

Republic Airways (RJET) helped to lead the airline sector lower, with the regional airline slumping by 6.3 percent on the day.

Considerable weakness was also visible among tobacco stocks, as reflected by the 1 percent loss posted by the NYSE Arca Tobacco Index. Universal Corp. (UVV) and Alliance Once (AOI) posted steep losses.

While utilities and networking also moved to the downside on the day, the weakness was partly offset by strong gains by steel and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Australia's All Ordinaries Index dipped by 0.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, percent, the French CAC 40 Index and the German DAX Index rose by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries moved slightly higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.58 percent.

Looking Ahead

Following the relatively quiet economic calendar over the past week, a slew of data is scheduled to be released next week. Traders are likely to keep a close eye on reports on retail sales, industrial production, housing starts, and producer and consumer prices.

However, reaction to the reports is likely to be shaded by how the data will impact the outlook for the Fed's stimulus program.

On the earnings front, big-name retailers such as Wal-Mart (WMT), Macy's (M), and Kohl's (KSS) are among the companies due to release their quarterly results next week.