Stocks Close Modestly Higher Ahead Of Christmas - U.S. Commentary

(RTTNews) - With Christmas on the horizon, stocks showed a lack of direction throughout much of the trading session on Friday. After closing modestly lower in the two previous sessions, the major averages spent much of the day bouncing back and forth across the unchanged line.

The major averages moved to the upside going into the close, ending the day modestly higher. The Dow inched up 14.93 points or 0.1 percent to 19,933.81, the Nasdaq rose 15.27 points or 0.3 percent to 5,462.69 and the S&P 500 crept up 2.83 points or 0.1 percent to 2,263.79.

The modest uptick on the day helped the major averages close higher for the week. While the S&P 500 edged up by 0.3 percent, the Dow and the Nasdaq both climbed by 0.5 percent.

The choppy trading on Wall Street came as many traders were away from their desks, looking to get a head start on the holiday weekend.

Trading activity is likely to remain relatively subdued next week ahead of another three-day weekend in celebration of New Year's Day.

On the U.S. economic front, the Commerce Department released a report showing a much bigger than expected increase in new home sales in the U.S. in the month of November.

The report said new home sales surged up by 5.2 percent to an annual rate of 592,000 in November from 563,000 in October. Economists had expected new home sales to rise by 3 percent to a rate of 580,000.

A separate report from the University of Michigan said consumer sentiment improved by even more than initially estimated in the month of December.

The University of Michigan said its consumer sentiment index for December was upwardly revised to 98.2 from the preliminary reading of 98.0.

Economists had expected the index to remain at 98.0, which was still well above the final November reading of 93.8.

With the unexpected upward revision, the consumer sentiment index reached its highest levels since January of 2004.

Sector News

Despite the lack of direction shown by the broader markets, gold stocks showed a strong move to the upside on the day. Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index surged up by 2.3 percent.

The strength among gold stocks came amid a modest increase by the price of the precious metal, with gold for February delivery rising $2.90 to $1,133.60 an ounce.

Significant strength was also visible among biotechnology stocks, as reflected by the 2.3 percent gain posted by the NYSE Arca Biotechnology Index. The index bounced off its lowest closing level in well over a month.

Within the biotech sector, shares of Synergy Pharmaceuticals (SGYP) moved sharply higher after the company reported positive results in a clinical trial of plecanatide in patients with irritable bowel syndrome with constipation.

Most of the other major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, with the Japanese market closed for a holiday. Hong Kong's Hang Seng Index fell by 0.3 percent, while China's Shanghai Composite Index slumped by 0.9 percent.

Meanwhile, the major European markets closed roughly flat in light pre-holiday trading. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries moved slightly higher on the day after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 2.543 percent.

Looking Ahead

Following the long Christmas weekend, next week's trading may remain somewhat subdued as 2016 draws to a close.

Nonetheless, traders are likely to keep an eye on reports on consumer confidence, pending home sales, and Chicago-area business activity.