Stocks Move Modestly Lower Amid Quiet Trading Day - U.S. Commentary

(RTTNews) - Stocks moved modestly lower over the course of the trading session on Friday after initially showing a lack of direction. Selling pressure remained relatively subdued, however, limiting the downside for the markets.

The major averages ended the day in the red but off their lows of the session. The Dow slipped 35.89 points or 0.2 percent to 18,867.93, the Nasdaq edged down 12.46 points or 0.2 percent to 5,321.51 and the S&P 500 dipped 5.22 points or 0.2 percent to 2,181.90.

Despite the drop on the day, the major averages closed higher for the week. The Dow inched up by 0.1 percent, the Nasdaq jumped by 1.6 percent and the S&P 500 advanced by 0.8 percent.

Profit taking may have contributed to the modest weakness on Wall Street after the major averages ended the previous session within striking distance of new record closing highs.

Nonetheless, traders seemed somewhat reluctant to make more significant moves amid a relatively quiet day on the U.S. economic front.

The Conference Board released a report showing a slight increase by its index of leading economic indicators, although the data does not typically impact the markets.

The report said the leading economic index crept up by 0.1 percent in October after edging up by 0.2 percent in September. The uptick by the index matched economist estimates.

"Although its six-month growth rate has moderated, the index still suggests that the economy will continue expanding into early 2017," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.

Among individual stocks, shares of Abercrombie & Fitch (ANF) came under pressure after the apparel retailer reported third quarter results that came in below analyst estimates.

Gap (GPS) also fell sharply after reporting lower third quarter earnings and sales and forecasting full-year earnings below analyst estimates.

On the other hand, shares of Marvell Technology (MRVL) spiked higher after the chip maker reported better than expected third quarter results and announced a $1 billion stock buyback.

Sector News

After spiking in reaction to the news of President-elect Donald Trump's surprise victory last week, pharmaceutical stocks have trended lower over the past several sessions.

Pharmaceutical stocks saw continued weakness on the day, dragging the NYSE Arca Pharmaceutical Index down by 1.4 percent. The index has nearly offset the sharp jump that was seen last Wednesday.

Notable weakness was also visible among biotechnology stocks, as reflected by the 1.1 percent drop by the NYSE Arca Biotechnology Index.

On the other hand, some strength was visible among natural gas, brokerage, and computer hardware stocks, helping to limit the downside for the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.6 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets moved to the downside on the day. While the French CAC 40 Index fell by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index dipped by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries extended the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.9 basis points to 2.335 percent.

Looking Ahead

While next week's trading activity may be somewhat subdued due to the Thanksgiving Day holiday on Thursday, traders will be presented with several key economic reports.

Trading could be impacted by reaction to reports on new and existing home sales, durable goods orders, and consumer sentiment.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which could shed some additional light on the outlook for interest rates.

On the earnings front, Tyson Foods (TSN), Campbell Soup (CPB), Hewlett Packard Enterprise (HPE), HP Inc. (HPQ), and Deere (DE) are among the companies due to report their quarterly results next week.