Stocks Close Nearly Flat Following Late-Day Pullback - U.S. Commentary

(RTTNews) - After seeing modest strength for much of the session, stocks gave back ground going into the close of trading on Wednesday. Despite the late-day pullback, the Dow managed to end the session at a new record closing high.

The Dow inched up 6.04 points or less than a tenth of a percent to 18,030.21, while the Nasdaq rose 8.05 points or 0.2 percent to 4,773.47. Meanwhile, the S&P 500 slipped into the red in the final minutes of trading, edging down 0.29 points or less than a tenth of a percent to 2,081.88.

The modest strength seen for most of the day was partly due to the release of a report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended December 20th.

The report said initial jobless claims fell to 280,000 from the previous week's unrevised level of 289,000, while economists had expected claims to inch up to 290,000.

With the unexpected drop, jobless claims slid to their lowest level since hitting 278,000 in the week ended November 1st.

Stocks also benefited from the recent upward momentum trigged by the Federal Reserve's monetary policy announcement last Wednesday.

Nonetheless, trading activity remained subdued, as traders seemed reluctant to make significant moves amid the holiday-shortened Christmas Eve session.

Among individual stocks, shares of Brookfield Residential Properties (BRP) moved notably higher after the land developer and homebuilder agreed to be taken private by Brookfield Asset Management (BAM).

Novo Nordisk (NVO) also turned in a strong performance on news the FDA approved its New Drug Application for Saxenda for the treatment of obesity.

On the other hand, shares of Cal-Maine Foods (CALM) moved to the downside after the egg producer reported weaker than expected second quarter earnings.

Sector News

While many of the major sectors ended the day showing only modest moves, gold stocks showed a strong move to the upside. Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index surged up by 2.9 percent.

The gains by gold stocks came even though the price of the precious metal moved lower on the day, with gold for February delivery sliding $4.50 to $1,173.50 an ounce.

Significant strength also remained visible among airline stocks, as reflected by the 1.9 percent gain posted by the NYSE Arca Airline Index. With the gain, the index reached its best closing level in over twelve years.

Utilities stocks also turned in a strong performance, driving the Dow Jones Utilities Average up by 1.7 percent to a record closing high. Biotechnology stocks also regained some ground after falling sharply on Tuesday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Australia's All Ordinaries Index edged up by 0.2 percent.

Meanwhile, the European markets turned in a mixed performance, with several markets closed for the day. While the U.K.'s FTSE 100 Index inched up by 0.2 percent, the French CAC 40 Index fell by 0.4 percent.

In the bond market, treasuries ended the day nearly flat after seeing modest weakness for much of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ticked up by less than a basis point to 2.264 percent.

Looking Ahead

Following the Christmas Day holiday on Thursday, trading activity is likely to be subdued when the markets reopen on Friday amid a lack of major U.S. economic data.