Major Averages End Choppy Session At New Record Highs - U.S. Commentary

(RTTNews) - After initially moving to the downside, stocks turned in a lackluster performance over the course of trading session on Friday. Even with the choppy trading, the major averages managed to reach new record closing highs.

The Dow spent much of the day in negative territory but eventually ended the day up 4.28 points or less than a tenth of a percent at 20,624.05. The Nasdaq climbed 23.68 points or 0.4 percent to 5,838.58, while the S&P 500 rose 3.94 points or 0.2 percent to 2,351.16.

For the week, the Nasdaq surged up by 1.8 percent, while the Dow and the S&P 500 jumped by 1.7 percent and 1.5 percent, respectively.

Profit taking contributed to the initial weakness on Wall Street, although traders seemed somewhat reluctant to make significant moves.

The recent upward momentum on Wall Street eventually took over, helping to lift the major averages off their lows and into positive territory.

Nonetheless, trading activity remained somewhat subdued, as some traders looked to get a head start on the long holiday weekend.

On the U.S. economic front, the Conference Board released a report showing a bigger than expected increase by its index of leading U.S. economic indicators in the month of January.

The Conference Board said its leading economic index climbed by 0.6 percent in January after rising by 0.5 percent in December. Economists had expected the index to increase by 0.4 percent.

Among individual stocks, Unilever (UN) and Kraft Heinz (KHC) both moved notably higher after Unilever rejected a $143 billion takeover offer from Kraft Heinz. Kraft Heinz said it would continue to pursue a merger.

Shares of TrueCar (TRUE) also saw considerable strength after the car buying website operator reported a narrower than expected fourth quarter loss and provided upbeat guidance.

Meanwhile, Nu Skin (NUS) came under pressure after the company reported weaker than expected fourth quarter results and offered disappointing guidance.

Sector News

Despite the higher close by the major averages, substantial weakness was visible among gold stocks. Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index tumbled by 2.7 percent.

The weakness among gold stocks came amid a modest decrease by the price of the precious metal, with gold for April delivery slipping $2.50 to $1,239.10 an ounce.

Oil service stocks also moved to the downside on the day, dragging the Philadelphia Oil Service Index down by 1.2 percent. Weatherford (WFT) led the sector lower, slumping by 4.4 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slid by 0.6 percent, while Hong Kong's Hang Seng Index fell by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the German DAX Index closed nearly unchanged and the French CAC 40 Index fell by 0.7 percent.

In the bond market, treasuries extended the rebound seen in the previous session but closed off their best levels. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.5 basis points to 2.425 percent.

Looking Ahead

Following the slew of data that was released over the past week, the economic calendar for next week is relatively quiet.

Traders are likely to keep an eye on reports on new and existing home sales, consumer sentiment, and weekly jobless claims.

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

Trading could also be impacted by reaction to quarterly results from retail giants Wal-Mart (WMT) and Home Depot (HD).