Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - After moving mostly higher over the course of the previous session, stocks fluctuated as the trading day progressed on Friday. Despite the lackluster performance, the tech-heavy Nasdaq ended the session at a new record closing high.

The major averages finished the day on opposite sides of the unchanged line. While the Nasdaq ticked up 4.50 points or 0.1 percent to 5,232.89, the Dow dipped 37.05 points or 0.2 percent to 18,576.47 and the S&P 500 edged down 1.74 points or 0.1 percent to 2,184.05.

Even with the mixed performance on the day, the major averages all moved modestly higher for the week. While the S&P 500 inched up by 0.1 percent, the Dow and the Nasdaq both crept up by 0.2 percent.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves after the recent climb to record highs.

Traders were also digesting the latest batch of U.S. economic data, including a Commerce Department report showing that retail sales were unexpectedly flat in the month of July.

The Commerce Department said retail sales were virtually unchanged in July after climbing by an upwardly revised 0.8 percent in June. Economists had expected sales to rise by 0.4 percent.

Excluding a jump in auto sales, retail sales fell by 0.3 percent in July after advancing by an upwardly revised 0.9 percent in June. Ex-auto sales had been expected to rise by 0.2 percent.

The Labor Department also released a report showing an unexpected decrease in producer prices in the month of July.

The report said the producer price index for final demand fell by 0.4 percent in July after climbing by 0.5 percent in June. Economists had expected the index to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices dipped by 0.3 percent in July following a 0.4 percent increase in June. Core prices had been expected to edge up by 0.2 percent.

"With activity being softer than hoped and pipeline inflation pressures looking benign, it doesn't offer much support to the view the Fed will be hiking rates imminently," said ING senior economist James Knightley.

A separate report from the University of Michigan showed that consumer sentiment has improved by less than expected in the month of August.

Sector News

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

Steel stocks showed a significant move to the downside, however, with the NYSE Arca Steel Index slumping by 3 percent. The index pulled back further off the more than one-year closing high set last Friday.

Ryerson Holding (RYI) helped to lead the steel sector lower, plunging by 13.1 percent to its lowest closing level in almost three months.

Considerable weakness also emerged among chemical stocks, as reflected by the 1.1 percent loss posted by the Dow Jones Chemicals Index. Industry giants Dow Chemical (DOW) and DuPont (DD) posted notable losses.

Oil service and railroad stocks also moved to the downside on the day, while some strength was visible among natural gas and computer hardware stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday on the heels of the overnight strength on Wall Street. Japan's Nikkei 225 Index surged up by 1.1 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets finished the day on opposite sides of the unchanged line. While the U.K.'s FTSE 100 Index closed slightly higher, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index dipped by 0.3 percent.

In the bond market, treasuries moved notably higher following the disappointing retail sales data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.8 basis points to 1.515 percent.

Looking Ahead

Economic data may continue to attract attention next week, with traders likely to keep an eye on reports on homebuilder confidence, consumer prices, housing starts, industrial production, and regional manufacturing activity.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which could shed some light on the outlook for interest rates.

On the earnings front, Home Depot (HD), Lowe's (LOW), Target (TGT), Cisco Systems (CSCO), and Wal-Mart (WMT) are among the companies due to report their quarterly results next week.