Stocks See Three-Day Losing Streak To Close Out Strong Year - U.S. Commentary

(RTTNews) - Stocks moved mostly lower over the course of the final trading day of the year on Friday. With the drop on the day, the major averages closed lower for the third consecutive session.

The major averages ended the day firmly in negative territory but off their lows of the session. The Dow fell 57.18 points or 0.3 percent to 19,762.60, the Nasdaq slumped 48.97 points or 0.9 percent to 5,383.12 and the S&P 500 slid 10.43 points or 0.5 percent to 2,238.83.

For the week, the Dow dropped by 0.9 percent, while the Nasdaq and the S&P 500 tumbled by 1.5 percent and 1.1 percent, respectively.

Nonetheless, the major averages posted substantial gains for the year. The Dow soared by 13.4 percent, the Nasdaq surged up by 7.5 percent and the S&P 500 jumped by 9.5 percent.

Profit taking contributed to the continued weakness on Wall Street after the tech-heavy Nasdaq reached a record closing high on Tuesday.

Negative sentiment was also generated by a report from MNI Indicators showing a notable slowdown in the pace of growth in Chicago-area business activity in the month of December.

MNI Indicators said its Chicago Business Barometer slid to 54.6 in December after jumping to a nearly two-year high of 57.6 in November.

While a reading above 50 indicates continued growth in Chicago-area business activity, economists had expected the index to show a much more modest drop to 57.0.

Trading activity on the day was relatively light, however, with some traders already away from their desks ahead of another long weekend.

Sector News

After initially moving to the upside, gold stocks showed a notable downturn over the course of the trading session. The NYSE Arca Gold Bugs Index slumped by 3.8 percent after reaching its best intraday level in well over a month.

The pullback by gold stocks came amid a decrease by the price of the precious metal, with gold for February delivery sliding $6.40 to $1,151.70 an ounce.

Steel stocks also came under pressure on the day, dragging the NYSE Arca Steel Index down by 2 percent. With the drop, the index fell to a one-month closing low.

Considerable weakness was also visible among semiconductor stocks, as reflected by the 1.6 percent decline by the Philadelphia Semiconductor Index. The index pulled back further off the sixteen-year closing high it set on Tuesday.

Telecom, software, and internet stocks also moved to the downside on the day, while notable strength emerged among commercial real estate stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. Japan's Nikkei 225 Index edged down by 0.2 percent, while Hong Kong's Hang Seng Index jumped by 1 percent.

Meanwhile, the major European markets all moved to the upside on the day, with some markets in the region closing early. While the French CAC 40 Index climbed by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index both rose by 0.3 percent.

In the bond market, treasuries moved higher, extending the upward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.446 percent.

Looking Ahead

When the markets reopen in the new year, traders are likely to keep a close eye on the monthly jobs report due out next Friday.

Reports on manufacturing activity, international trade, and construction spending may also attract attention next week along with the minutes of the latest Federal Reserve meeting.