Stocks Close Mostly Higher Amid Light Post-Christmas Trading - U.S. Commentary

(RTTNews) - Following the Christmas Day holiday on Thursday, stocks moved mostly higher over the course of the trading day on Friday. The gains on the day lifted the Dow and the S&P 500 to new record closing highs, while the Nasdaq reached its best levels since 2000.

The major averages gave back ground going into the close but managed to remain in positive territory. The Dow inched up 23.50 points or 0.1 percent to 18,053.71, the Nasdaq advanced 33.39 points or 0.7 percent to 4,806.86 and the S&P 500 rose 6.89 points or 0.3 percent to 2,088.77.

For the holiday-interrupted week, the Dow jumped by 1.4 percent, while the Nasdaq and the S&P 500 both climbed by 0.9 percent.

The strength on Wall Street partly reflected the recent upward momentum for the markets, which has led to a seven-day winning streak for the Dow.

Stocks have trended higher since last Wednesday, when the Federal Reserve said it would be patient in beginning to normalize the stance of monetary policy.

Traders seem to have interpreted the remark as an indication that the Fed will be cautious in its decision to begin raising interest rates.

Continued signs of strength in the economy have also contributed to the recent positive sentiment, as the U.S. continues to outperform many of the other major developed nations.

Paul Dales, Senior U.S. Economist at Capital Economics, said upbeat personal spending data released on Tuesday means consumption growth in the fourth quarter could be as strong as 4.0 percent.

"It is clear that real consumption is being boosted by the effects of lower gasoline prices and the acceleration in job growth," Dales said.

He added, "The upshot is that it is now possible that GDP growth in the fourth quarter will be even stronger than our current 3.0 percent forecast."

Gold stocks turned in some of the market's best performances, driving the NYSE Arca Gold Bugs Index up by 3.1 percent. The strength in the sector came as gold for February delivery jumped $21.80 to $1,195.30 an ounce.

Significant strength was also visible among biotechnology stocks, as reflected by the 2.5 percent gain posted by the NYSE Arca Biotechnology Index. Exact Sciences (EXAS), BioMarin Pharmaceutical (BMRN) and Celgene (CELG) posted notable gains.

Utilities, airline, and telecom stocks also saw considerable strength, while most of the other major sectors showed more modest moves to the upside.

Nonetheless, trading activity was relatively subdued, as many traders remained away from their desks following the Christmas Day holiday on Thursday.

Other Markets

In overseas trading, many of the major markets across the Asia-Pacific region were closed on the day, although China's Shanghai Composite Index surged up by 2.8 percent. Japan's Nikkei 225 Index also inched up by 0.1 percent.

Meanwhile, following the Christmas Day holiday on Thursday, the major European markets remained closed on Friday for Boxing Day.

In the bond market, treasuries moved modestly higher after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.25 percent.

Looking Ahead

New Year's Eve and the New Year's Day holiday may keep traders on the sidelines for much of next week as well.

Nonetheless, trading could be impacted by the release of reports on consumer confidence, pending home sales and manufacturing activity.