With traders reluctant to make any significant moves, stocks showed a lack of direction throughout much of the trading day on Friday. The major averages lingered near the unchanged line for most of the session, eventually ending the day mixed.
After reaching a high above the key 13,000 level, the Dow gave back some ground, closing down 1.74 points or less than a tenth of a percent at 12,982.95. Meanwhile, the Nasdaq rose 6.77 points or 0.2 percent to 2,963.75 and the S&P 500 climbed 2.25 points or 0.2 percent to 1,365.74.
Despite the mixed performance on the day, the major averages all posted modest gains for the week. The Nasdaq advanced by 0.4 percent, while the Dow and the S&P 500 both rose by 0.3 percent.
The choppy trading on Wall Street came as traders stayed on the sidelines amid questions about whether the global economic situation supports further upside for the markets.
Traders largely shrugged off some relatively upbeat U.S. economic data, including a report from Thomson Reuters and the University of Michigan showing an unexpected improvement in consumer sentiment in the month of February.
The report showed that the consumer sentiment index for February was upwardly revised to 75.3 from the mid-month reading of 72.5. Economists had expected the index to be upwardly revised to 73.0.
With the bigger than expected upward revision, the consumer sentiment index showed a modest increase compared to the January reading of 75.0. The index is now at its highest level since February of 2011.
A separate report from the Commerce Department showed a modest drop in new home sales in the month of January, although sales came in well above estimates due to a revision to the December data.
The Commerce Department said new home sales slipped 0.9 percent to an annual rate of 321,000 in January from the revised December rate of 324,000. Economists had expected new home sales to edge up to 315,000 from the 307,000 originally reported for the previous month.
Among individual stocks, Nordson (NDSN) and Salesforce.com (CRM) posted strong gains after reporting better than expected quarterly results.
Meanwhile, J.C. Penney (JCP) ended the day modestly lower after the department store operator reported a fourth quarter loss compared to a year-ago profit. Excluding restructuring charges, however, the company reported a profit that exceeded analyst estimates.
While most of the major sectors showed only modest moves on the day, considerable weakness emerged among airline stocks. Extending a recent downward move, the NYSE Arca Airline Index fell by 1.9 percent to its worst closing level in a month.
JetBlue (JBLU) and US Airways (LCC) turned in two of the airline sector's worst performances, sliding by 4.4 percent and 3.7 percent, respectively.
Gold stocks also came under pressure, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent. The weakness in the sector came as gold for April delivery dropped $9.90 to $1,776.40 an ounce.
Housing and banking stocks also saw some weakness on the day, while significant strength was visible among health insurance stocks. With WellCare (WCG) leading the way higher, the Morgan Stanley Healthcare Payor Index advanced by 1.6 percent.
Steel, software, and railroad stocks also moved to the upside, helping to offset the weakness seen in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher over the course of the trading day on Friday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index edged up by 0.1 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index advanced by 0.6 percent and 0.8 percent, respectively.
In the bond market, treasuries ended the day nearly flat amid the choppy trading on Wall Street. The yield on the benchmark ten-year note inched down by less than a basis point to 1.977 percent.
U.S. economic data may attract some attention next week, with traders likely to keep an eye on reports on durable goods orders, manufacturing activity, personal income and spending, and weekly jobless claims.
Federal Reserve Chairman Ben Bernanke is also due to deliver the FOMC's semi-annual report to the House Financial Services Committee.
On the earnings front, Priceline (PCLN), Lowe's (LOW), Tenet Healthcare (THC), Progressive (PGR), and Costco (COST) are among the companies due to release their quarterly results next week.
by RTT Staff Writer
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