Stocks were able to eke out modest gains to kick off the last trading week of the year, with a lack of economic catalysts limiting movement in today's dealing. The major averages were able to move higher for a sixth straight session, setting fresh yearly closing highs.
Airline stocks came under considerable pressure today, however, as the weekend's attempted terrorist attack by a supposed al-Qaeda operative on a transatlantic flight bound for Detroit from Amsterdam sparked global security concerns.
Even though the attack was thwarted and resulted in no casualties or impact to airline operations, airlines worldwide have stepped up security measures in the wake of the attack.
In other news, holiday shopping showed a modest increase this year, according to the MasterCard Advisors' SpendingPulse report, which tracks national retail and service sales.
The report showed year-over-year growth in the period between Black Friday and December 24th in all sectors measured. Retail stocks saw modest strength following the report.
Also today, the Treasury Department sold $44.0 billion in two-year notes, seeing weaker than usual demand, with the bid-to-cover ratio for the auction coming at 2.91.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages moved to the upside going into the close, ending the day modestly higher. The Dow gained 26.98 points or 0.3 percent to close at 10,547.08, the Nasdaq advanced by 5.39 points or 0.2 percent to 2,291.78 and the S&P 500 rose by 1.30 points or 0.1 percent to 1,127.78.
Sector News
Healthcare provider stocks moved notably higher on the day, pushing the Morgan Stanley Healthcare Provider Index up by 0.8 percent on the day.
The index was boosted by shares of Sunrise Senior Living Inc. (SRZ), which surged up by 14.7 percent, closing at their highest price in nearly two months.
Oil service and pharmaceutical stocks also saw notable upside, while airline stocks fell on the day, dragging the NYSE Arca Airline Index down by 1.8 percent amid security concerns. With the retreat, the index pulled back off of Thursday's fourteen month closing high.
Housing and semiconductor stocks also saw selling pressure on the day, limiting the upside for the broader markets.
Dow Components
IBM Corp. (IBM) was the leading percentage gainer in the Dow, advancing by 1.3 percent. The stock rose for a fifth straight session, reaching its highest closing price in over nine years.
3M (MMM) also advanced by a notable margin, posting a gain of 1.1 percent. Shares were up for a sixth straight session, ending the session at a two year high.
DuPont (DD) AT&T (T) and Merck (MRK) also advanced, although by more conservative margins, while American Express (AXP) fell by 1.5 percent. With the decline, shares of the credit card giant backed off of Thursday's one month closing high.
Alcoa (AA) and Disney (DIS) also closed markedly lower, falling by 1.5 percent and 1.2 percent, respectively. The stocks fell from the roughly fifteen month closing highs set earlier this month.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed moderately higher on Monday. Japan's benchmark Nikkei 225 Index rose by 1.3 percent, while China's Shanghai Composite Index advanced by 1.5 percent.
The major European markets also ended the day moderately higher. The French CAC 40 Index and the German DAX Index rose by 0.9 percent and 0.8 percent, respectively, while the British markets were closed on the day.
In the bond markets, treasuries closed lower following the weaker-than-expected results of today's two-year note auction. Subsequently the yield on the benchmark ten-year note, which moves opposite of its price, finished at 3.842 percent, posting a gain of 3.5 basis points.
Looking Ahead
Tuesday, some of the trading action may be guided by the Conference Board's consumer confidence report for December, which is set to be made public at 10:00 a.m. ET.
Nonetheless, trading activity is likely to remain relatively subdued for the rest of the week amid another holiday-shortened week due to the New Year's Day holiday this Friday.
For comments and feedback: editorial@rttnews.com