After seeing strength for much of the trading day on Friday, stocks saw considerable volatility in the latter part of the session. The major averages showed big swings in the final two hours of trading before eventually ending the session mixed.
While the major averages closed well off their intraday highs, the S&P 500 still climbed 5.16 points or 0.3 percent to a new record closing high of 1,859.45. The Dow also rose 49.06 points or 0.3 percent to 16,321.71, while the Nasdaq slid 10.81 points or 0.3 percent to 4,308.12.
Despite the mixed performance on the day, the major averages all moved higher for the week. The Dow and the S&P 500 jumped 1.4 percent and 1.3 percent, respectively, while the Nasdaq advanced by 1 percent.
The strength seen for most of the session reflected a positive reaction to a slew of U.S. economic data, including a report showing an unexpected acceleration in the pace of Chicago-area business activity.
The report from MNI Indicators said the Chicago Business Barometer ticked up to 59.8 in February from 59.6 in January, with a reading above 50 indicating growth in Chicago-area business activity. Economists had expected the barometer to drop to 56.4.
Thomson Reuters and the University of Michigan also released a report showing a modest upward revision to their reading on consumer sentiment in February, while the National Association of Realtors reported a slight uptick in pending home sales in January.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a notable downward revision to pace of fourth quarter GDP growth.
The report said GDP rose by 2.4 percent in the fourth quarter compared to the previously reported 3.2 percent growth, but the data was viewed as old news.
Peter Boockvar, managing director at the Lindsey Group, said, "We're already 2/3 of the way thru Q1, which we know was influenced by the weather and is expected to slow to about 2% growth but to be followed by expected growth of around 3% in the 3 quarters thereafter in 2014."
The volatility seen later in the session was partly attributed to concerns about rising tensions in Ukraine and worries about the possibility of any significant developments over the weekend.
Among individual stocks, Monster Beverage (MNST) moved notably higher after reporting a jump in fourth quarter sales despite facing legal threats against its caffeinated energy drinks.
Shares of Jos. A. Bank (JOSB) also saw significant strength after the apparel retailer rejected Men's Wearhouse's (MW) $63.50 per share takeover offer as inadequate. The company indicated that it is willing to consider a higher price.
Meanwhile, shares of Pier 1 Imports (PIR) came under pressure after the home furnishings retailer cut is fourth quarter guidance due to significant disruptions from adverse weather in many major markets.
Biotechnology stocks came under considerable selling pressure in afternoon trading, contributing to a 2.2 percent drop by the NYSE Arca Biotechnology Index. With the loss, the index pulled back further off the record closing high it set on Tuesday.
ImmunoGen (IMGN) and Exact Sciences (EXAS) turned in two of the biotech sector's worst performances, falling by 7.2 percent and 5.9 percent, respectively.
Significant weakness also emerged among computer hardware stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca Computer Hardware Index. Logitech (LOGI) and Western Digital (WDC) posted notable losses.
Meanwhile, railroad stocks held on to their early gains, resulting in a 1.1 percent gain by the Dow Jones Railroads Index. Providence and Worcester (PWX) helped to lead the sector higher, jumping 6.1 percent.
Notable strength was also visible among oil service stocks, which benefited from a modest increase by the price of crude oil. With crude for April delivery climbing $0.19 to $102.59 a barrel, the Philadelphia Oil Service Index rose by 1.1 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Friday. Japan's Nikkei 225 Index dropped by 0.6 percent, while China's Shanghai Composite Index rose by 0.4 percent.
The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the German DAX Index jumped 1.1 percent and the French CAC 40 Index ended the day up by 0.3 percent.
In the bond market, treasuries recovered from an early move to the downside but still closed modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up 1.6 basis points to 2.658 percent after reaching a high of 2.698 percent.
Economic data is likely to be in focus next week, with the spotlight on the monthly employment report due to be released on Friday.
Ahead of the jobs report, trading could be impacted by the release of reports on manufacturing and service sector activity, personal income and spending, and private sector employment.
The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions from each of the twelve Fed districts.
On the earnings front, RadioShack (RSH), Costco (COST), Staples (SPLS), and H&R Block (HRB) are among the companies due to report their quarterly results next week.
by RTT Staff Writer
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