Stocks Close Roughly Flat For Second Straight Day - U.S. Commentary

(RTTNews) - Following the lackluster performance seen in the previous session, stocks continued to show a lack of direction during trading on Friday. The major averages spent much of the day lingering near the unchanged line.

The major averages eventually closed mixed. While the Nasdaq inched up 5.61 points or 0.1 percent to a new record closing high of 5,660.68, the Dow edged down 7.13 points or less than a tenth of a percent to 20,093.78 and the S&P 500 dipped 1.99 points or 0.1 percent to 2,294.69.

Despite the roughly sideways movement over the past two days, the major averages moved notably higher for the week. The Nasdaq surged up by 1.9 percent, the Dow jumped by 1.3 percent and the S&P 500 advanced by 1 percent.

The choppy trading on Wall Street came as traders remained reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following recent strength.

Traders were also digesting the mixed batch of earnings news released by several big-name technology companies after the close of trading on Thursday.

While Google parent Alphabet (GOOGL) reported weaker than expected fourth quarter earnings, Intel (INTC) and Microsoft (MSFT) both reported better than expected quarterly results.

In economic news, the Commerce Department released a report showing economic growth in the U.S. slowed by more than anticipated in the final three months of 2016.

The report said gross domestic product increased by 1.9 percent in the fourth quarter following a 3.5 percent jump in the third quarter. Economists had expected GDP to climb by 2.2 percent.

Economists noted that the slowdown was largely due to the impact of fluctuations in trade and said the third and fourth quarters together indicate a strong second half.

A separate report from the Commerce Department showed durable goods orders unexpectedly declined in December amid a continued decrease in orders for transportation equipment.

The Commerce Department said durable goods orders fell by 0.4 percent in December after tumbling by a revised 4.8 percent in November. Economists had expected durable goods orders to jump by 2.6 percent.

However, excluding the drop in orders for transportation equipment, durable goods orders rose by 0.5 percent in December after jumping by 1.0 percent in November. The increase matched estimates.

The University of Michigan also released a report showing that consumer sentiment unexpectedly improved to its highest level in thirteen years in January.

Sector News

After moving notably higher over the past few sessions, airline stocks gave back ground on the day. Reflecting the weakness in the sector, the NYSE Arca Airline Index tumbled by 2.1 percent.

American Airlines (AAL) posted a notable loss after reporting fourth quarter earnings that fell year-over-year but matched analyst estimates. The airline also announced a new $2.0 billion share repurchase authorization.

Considerable weakness was also visible among energy stocks, which came as pressure as the price of crude oil for March delivery fell $0.61 to $53.17 a barrel.

On the other hand, software and semiconductor stocks saw significant strength on the heels of the upbeat earnings news from Microsoft and Intel.

Biotechnology stocks also showed a strong move to the upside, resulting in a 1.3 percent advance by the NYSE Arca Biotechnology Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index rose by 0.3 percent, while Australia's All Ordinaries Index advanced by 0.7 percent. The Chinese markets were closed on the day.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index increased by 0.3 percent, the German DAX Index dipped by 0.3 percent and the French CAC 40 Index slid by 0.6 percent.

In the bond market, treasuries saw further upside after turning higher over the course of 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 2.481 percent.

Looking Ahead

The Federal Reserve is likely to be back in the spotlight next week, with the central bank due to announce its latest monetary policy decision on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement.

The monthly jobs report is also likely to be in focus next week along with reports on personal income and spending, manufacturing and service sector activity, and labor productivity.

On the earnings front, ExxonMobil (XOM), MasterCard (MA), Pfizer (PFE), UPS (UPS), Apple (AAPL), Facebook (FB), Amazon (AMZN), and Visa (V) are among a slew of companies due to report their quarterly results next week.