Nasdaq, S&P 500 Give Back Ground But Dow Inches Up To New Record Closing High

Stocks moved mostly lower early in the session on Friday but regained ground over the course of the trading day. The major averages climbed well off their worst levels of the day before eventually closing narrowly mixed.

While the Dow inched up 38.17 points or 0.1 percent to a new record closing high of 42,063.36, the S&P 500 slipped 11.09 points or 0.2 percent to 5,702.55 and the Nasdaq fell 65.66 points or 0.4 percent to 17,948.32.

Even with the mixed performance on the day, the major averages all posted strong gains for the week. The Dow shot up by 1.6 percent, while the Nasdaq and the S&P 500 jumped by 1.5 percent and 1.4 percent, respectively.

The early weakness on Wall Street partly reflected profit taking, with some traders cashing in on the significant rally seen during trading on Thursday.

Stocks moved sharply higher on Thursday amid a positive reaction to the Federal Reserve’s decision to slash interest rates by half a percentage point.

Selling pressure waned over the course of the session, however, as traders seemed reluctant to make more significant moves as they question what the next catalyst for the markets will be now that the Fed’s first rate cut is in the rearview mirror.

A lack of major U.S. economic data may also have kept some traders on the sidelines ahead of the release of several key reports next week.

While the Fed has already signaled plans to continue lowering rates in the coming months, the data could still impact market sentiment.

Reports on durable goods orders, new home sales and consumer confidence are likely to attract attention next week along with a report on personal income and spending that includes the Fed’s preferred inflation gauge.

Sector News

Despite the recovery attempt by the broader markets, transportation stocks continued to see substantial weakness, dragging the Dow Jones Transportation Average down by 3.5 percent. The index ended Thursday’s session at its best closing level in over a year.

A steep drop by shares of FedEx (FDX) weighed on the sector, with the delivery giant plunging by 15.2 percent after reporting disappointing fiscal first quarter earnings and lowering its full-year guidance.

Housing stocks also showed a significant move to the downside on the day, resulting in a 2.3 percent slump by the Philadelphia Housing Sector Index.

Steel and semiconductor stocks also saw considerable weakness, while gold and computer hardware stocks showed strong moves to the upside.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index shot up by 1.5 percent, while Hong Kong’s Hang Seng Index leapt by 1.4 percent.

Meanwhile, the major European markets showed notable moves to the downside on the day. While the U.K.’s FTSE 100 Index slumped by 1.2 percent, the French CAC 40 Index and the German DAX Index both tumbled by 1.5 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 3.728 percent.

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