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U.S. Stocks Finish Choppy Trading Day Little Changed

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Stocks showed a lack of direction over the course of the trading day on Friday, extending the lackluster performance seen in the previous session. The major averages spent the day bouncing back and forth across the unchanged line.

Eventually, the major averages ended the day little changed. While the Dow inched up 34.30 points or 0.1 percent to 27,931.02, the Nasdaq dipped 23.20 points or 0.2 percent to 11,019.30 and the S&P 500 edged down 0.58 points or less than a tenth of a percent to 3,372.85.

Despite closing mixed for two straight days, the major averages all moved to the upside for the week. The Dow jumped by 1.8 percent, the S&P 500 rose by 0.6 percent and the Nasdaq inched up by 0.1 percent.

Traders seemed reluctant to make more significant moves amid uncertainty about the near-term outlook for the markets.

The S&P 500 once again failed to reach a new record high during, raising concerns recent upward momentum on Wall Street may have reached its limit.

With earnings season largely in the rear-view mirror and talks about a new coronavirus relief bill at a stalemate, traders may be unsure about the next catalyst to drive the markets.

Traders were also digesting a slew of U.S. economic data, including a report from the Commerce Department showing retail sales jumped by less than expected in July amid a pullback in auto sales.

The Commerce Department said retail sales advanced by 1.2 percent in July after soaring by an upwardly revised 8.4 percent in June.

Economists had expected retail sales to jump by 1.9 percent compared to the 7.5 percent spike originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales surged up by 1.9 percent in July after skyrocketing by 8.3 percent in June. Ex-auto sales were expected to increase by 1.3 percent.

Meanwhile, the Federal Reserve released a report showing a jump in U.S. industrial production in the month of July that matched economist estimates.

The Fed said industrial production surged up by 3.0 percent in July after soaring by an upwardly revised 5.7 percent in June.

Economists had expected production to jump by 3.0 percent compared to the 5.4 percent spike originally reported for the previous month.

Despite the substantial increases seen over the past two months, the Fed noted production is still 8.4 percent below its pre-pandemic February level.

A preliminary reading released by the University of Michigan unexpectedly showed a slight improvement in U.S. consumer sentiment in the month of August.

The report said the consumer sentiment index inched up to 72.8 in August from 72.5 in July. The uptick surprised economists, who had expected the index to edge down to 72.0.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster performance by the broader markets.

Natural gas stocks showed a substantial move to the upside, however, with the NYSE Arca Natural Gas Index spiking by 2.4 percent.

A sharp increase by the price of natural gas contributed to the strength in the sector, with natural gas for September delivery surging up $0.174 or 8 percent to $2.356 per million BTUs.

On the other hand, utilities stocks moved to the downside over the course of the session, dragging the Dow Jones Utilities Average down by 1.1 percent.

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 crept up by 0.2 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slid by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both slumped by 1.6 percent.

In the bond market, treasuries ended the session little changed after seeing modest strength in morning trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.709 percent.

Looking Ahead

Next week's trading may be impacted by reaction to a slew of housing data, including reports on homebuilder confidence, housing starts, and existing home sales.

Reports on regional manufacturing activity may also attract some attention along with the minutes of the Federal Reserve's latest monetary policy meeting.

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