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Dow, S&P 500 Reach Record Closing Highs, Nasdaq Closes Modestly Lower

wallstreet aug14 29dec21 lt

After ending the previous session on opposite sides of the unchanged line, the major U.S. stock indexes turned in another mixed performance during trading on Wednesday. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs.

The Dow rose 90.42 points or 0.3 percent to 36,488.63, closing high for the sixth consecutive session. The S&P 500 also inched up 6.71 points or 0.1 percent to 4,793.06, while the Nasdaq climbed well off its worst levels but still closed down 15.51 points or 0.1 percent at 15,766.22.

Traders seemed reluctant to continue making significant moves following recent strength in the markets, which has helped stocks recover from the sell-off seen in reaction to initial reports about the Omicron variant of the coronavirus.

While the Omicron variant has contributed to a surge in new coronavirus cases around the world, traders seem optimistic that the milder symptoms associated with the new strain will not lead to a significant economic slowdown.

Traders often engage in so-called "window dressing" going into the end of the year, although activity may still be somewhat subdued ahead of the holiday.

Even though the U.S. markets will not be closed for the New Year's holiday, traders may still look to get a head start on the festivities.

On the U.S. economic front, a report released by the National Association of Realtors showed an unexpected pullback in pending home sales in the month of November.

NAR said its pending home sales index slid 2.2 percent to 122.4 in November after spiking 7.5 percent to 125.2 in October. The decrease surprised economists, who had expected pending home sales to rise by 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

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

Airline stocks showed a substantial move to the downside, however, with the NYSE Arca Airline Index plunging by 2.5 percent.

Significant weakness was also visible among oil service stocks, as reflected by the 1.4 percent drop by the Philadelphia Oil Service Index. The weakness in the sector came despite an increase by the price of crude oil.

On the other hand, housing stocks moved notably higher despite the disappointing pending home sales data, driving the Philadelphia Housing Sector Index up by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.6 percent, while Australia's S&P/ASX 200 Index jumped by 1.2 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index advanced by 0.7 percent, the French CAC 40 Index dipped by 0.3 percent and the German DAX Index fell by 0.7 percent.

In the bond market, treasuries moved notably lower over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.2 basis points to a one-month closing high of 1.543 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to the weekly jobless claims data along with a report on Chicago-area business activity.

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