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Stocks Close Mostly Lower But Dow Ekes Out Modest Gain - U.S. Commentary

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Following the lackluster performance seen in the previous session, stocks moved mostly lower during trading on Friday. Despite the drop by the broader markets, the relatively narrow Dow managed to eke out a modest gain.

The major averages turned in another mixed performance on the day. While the Dow inched up 13.01 points or 0.1 percent to 21,797.79, the Nasdaq fell 37.68 points or 0.6 percent to 6,360.19 and the S&P 500 dipped 3.67 points or 0.2 percent to 2,461.43.

For the holiday-shortened week, the major averages moved notably lower. While the Nasdaq tumbled by 1.2 percent, the Dow and the S&P 500 slid by 0.9 percent and 0.6 percent, respectively.

The weakness on Wall Street came amid concerns about the economic impact of Hurricane Irma, with the massive storm expected to make landfall in Florida early Sunday.

While Irma was downgraded from a category 5 to a category 4, FEMA Administrator Brock Long warned the hurricane continues to be a threat that is going to devastate the U.S. in either Florida or some of the southeastern states.

The approach of Irma comes close on the heels of Hurricane Harvey, which led to widespread devastation and flooding in Texas.

Selling pressure was also generated due to worries about North Korea, which is celebrating a holiday on Saturday that could be a key date for another intercontinental ballistic missile launch.

Nonetheless, the Dow managed to close modestly higher due largely to a substantial rebound by Travelers (TRV). Shares of Travelers jumped 4 percent, bouncing off a nine-month closing low.

Traders largely shrugged off a report from the Commerce Department showing wholesale inventories rose by more than anticipated in the month of July.

The Commerce Department said wholesale inventories climbed by 0.6 percent in July, matching the downwardly revised increase in June.

Economists had expected inventories to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

A separate report from the Federal Reserve showed consumer credit jumped by $18.5 billion in July compared to economist estimates for an increase of $15.1 billion.

Sector News

Energy stocks saw substantial weakness on the day, as the price of crude oil fell sharply amid concerns about the impact of Hurricane Irma. Crude for October delivery plunged $1.61 to $47.48 a barrel.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index plummeted by 2.8 percent and the Philadelphia Oil Service Index tumbled by 1.8 percent.

Considerable weakness was also visible among steel stocks, as reflected by the 1.7 percent slump by the NYSE Arca Steel Index. The drop by the index came after it ended the previous session at its best closing level in six months.

Gold, semiconductor, and telecom stocks also saw notable weakness on the day, while housing and trucking stocks showed strong moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index slid by 0.6 percent, while Hong Kong's Hang Seng Index climbed by 0.5 percent.

The major European markets also ended the day mixed. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index closed just below the unchanged line and the U.K.'s FTSE 100 Index fell by 0.3 percent.

In the bond market, treasuries showed a lack of direction over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 2.061 percent.

Looking Ahead

After a slow start, the economic calendar picks up in the latter part of next week with the release of reports on producer and consumer price inflation, retail sales, and industrial production.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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