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U.S. Stocks Close Mixed Following Lackluster Session

wallstreet sept27 23oct20 lt

Stocks showed a lack of direction over the course of the trading day on Friday, with the major averages bouncing back and forth across the unchanged line before eventually ending the day mixed.

The Dow posted a modest loss on the day, edging down 28.09 points or 0.1 percent to 28,335.57, while the broader Nasdaq and S&P 500 added to Thursday's gains. The Nasdaq climbed 42.28 points or 0.4 percent to 11,548.28 and the S&P 500 rose 11.90 points or 0.3 percent to 3,465.39.

Despite the mixed close on the day, the major averages all moved lower for the week. The Nasdaq slumped by 1.1 percent, the Dow slid by 0.9 percent and the S&P 500 fell by 0.5 percent.

The choppy trading on the day came amid a lack of concrete news out of Washington regarding a new coronavirus stimulus bill.

Traders have generally remained optimistic that a bill will eventually be passed, although they may be growing tired of waiting.

House Speaker Nancy Pelosi has recently suggested negotiations with Treasury Secretary Steven Mnuchin are making progress, but it seems unlikely a bill will be passed before the elections early next month.

During the final presidential debate Thursday night, President Donald Trump accused Pelosi of stalling a new relief package until after the elections for political purposes.

Trump also claimed that he could get reluctant Senate Republicans to support a broader stimulus bill if an agreement is finally reached.

A lack of major U.S. economic data may also have kept traders on the sidelines following the release of upbeat jobless claims and existing home sales data on Thursday.

Meanwhile, a steep drop by shares of Intel (INTC) weighed on the Dow, with the semiconductor giant plunging by 10.6 percent.

Intel fell sharply after reporting third quarter earnings that beat analyst estimates but on weaker than expected revenues for its Data Center Group.

Credit card giant American Express (AXP) also showed notable move to the downside after reporting third quarter earnings that missed expectations.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Housing stocks showed a strong move back to the upside, however, with the Philadelphia Housing Sector Index climbing by 1.8 percent after moving sharply lower over the past few sessions.

Significant was also visible among steel stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Steel Index. The index ended the session at its best closing level in eight months.

On the other hand, computer hardware stocks saw notable weakness on the day, dragging the NYSE Arca Computer Hardware Index down by 1.1 percent.

Shares of Seagate Technology (STX) came under pressure after the data storage company reported fiscal first quarter earnings that beat estimates but on weaker than expected revenues.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index crept up by 0.2 percent, while China's Shanghai Composite Index slumped by 1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index climbed by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index surged up by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.841 percent.

Looking Ahead

Any developments in Washington are likely to attract attention next week, although traders are also likely to keep an eye on a slew of earnings news.

Caterpillar (CAT), Merck (MRK), Pfizer (PFE), Microsoft (MSFT), Boeing (BA), General Electric (GE), Ford (F), Alphabet (GOOGL), Amazon (AMZN), Facebook (FB), and Exxon Mobil (XOM) are just a few of the companies due to report their quarterly results next week.

Reports on new home sales, durable goods orders, consumer confidence, pending home sales and personal income and spending may also attract attention.

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