With traders getting a head start on the long weekend, stocks turned in another lackluster performance during trading on Friday. The major averages bounced back and forth across the unchanged line after closing mixed in each of the three previous sessions.
The major averages eventually ended the day in the red, with the Dow underperforming its counterparts. The Dow fell 74.92 points or 0.6 percent to 12,454.83, while the Nasdaq edged down 1.85 points or 0.1 percent to 2,837.53 and the S&P 500 slipped 2.86 points or 0.2 percent to 1,317.82.
Despite the losses on the day, the major averages all moved higher for the week, bouncing off last Friday's four-month lows. The Dow rose by 0.7 percent, while the Nasdaq and the S&P 500 advanced by 2.1 percent and 1.7 percent, respectively.
The choppy trading seen for most of the session came amid a relatively quiet day on Wall Street, with many traders away from their desks ahead of the Memorial Day weekend.
Traders largely shrugged off the release of a report from Reuters and the University of Michigan showing that U.S. consumer sentiment in the month of May improved by more than previously estimated.
The report showed that the consumer sentiment index for May was upwardly revised to 79.3 from the mid-month reading of 77.8. The upward revision surprised economists, who had expected the index to come in unchanged.
With the upward revision, the index came in well above the final April reading of 76.4 and is now at its highest level since October of 2007.
Lingering concerns about the financial situation in Europe likely offset any positive sentiment generated by the better than expected reading on consumer sentiment.
Additionally, the consumer sentiment index is widely seen as a coincident indicator and not a sign of how consumers will behave going forward.
Among individual stocks, shares of Talbots (TLB) tumbled 41 percent after private equity firm Sycamore Partners revealed that it is not prepared to execute a transaction to acquire the women's apparel retailer.
Verifone (PAY) also posted a steep loss after the electronic payments company reported better than expected second quarter earnings but forecast full year results toward the low end of estimates. Shares of Verifone fell by 15.5 percent.
Meanwhile, Frontline (FRO) posted a strong gain after the oil tanker operator reported better than expected first quarter earnings and provided upbeat guidance. Shares of Frontline rose by 8 percent.
Futures exchange operator CME Group (CME) also ended the day higher after announcing a 5-for-1 split of its common stock in the form of a 400 percent stock dividend.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index crept up by 0.2 percent, while Australia's All Ordinaries Index fell by 0.6 percent.
Meanwhile, the major European markets ended the day modestly higher after seeing some volatility. While the U.K.'s FTSE 100 Index inched up by less than a tenth of a percent, the French CAC 40 Index and the German DAX Index rose by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries moved modestly higher as traders looked for a safe haven ahead of the long weekend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 1.745 percent.
While most of the major sectors showed only modest moves on the day, significant strength was visible among semiconductor stocks. Reflecting the strength in the semiconductor sector, the Philadelphia Semiconductor Index advanced by 1.4 percent.
SanDisk (SNDK) and Micron Technology (MU) turned in two of the semiconductor sector's best performances, ending the day up by 4.6 percent and 3.8 percent, respectively.
Health insurance stocks also saw considerable strength, resulting in a 1.3 percent gain by the Morgan Stanley Healthcare Payor Index. With the gain, the index climbed further off last Friday's five-month closing low.
Airline, healthcare provider, and biotech stocks also posted notable gains, while weakness was visible among railroad, electronic storage, and defense stocks.
Developments in Europe are likely to remain in focus in the early part of next week, but attention is likely to turn toward the monthly U.S. jobs report as the week progresses.
Reports on consumer confidence, pending home sales, personal income and spending, and national manufacturing activity could also impact trading.
Nonetheless, some traders are likely to remain away from their desks following the long weekend, potentially leading to light trading activity in the days leading up to the jobs report.
by RTT Staff Writer
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