Stocks Close Mostly Lower Following Slew Of Economic Data - U.S. Commentary

(RTTNews) - After ending the previous session mixed, stocks moved mostly lower over the course of the trading day on Friday. Selling pressure was relatively subdued, however, limiting the downside for the markets.

The major averages all ended the day firmly in negative territory. The Dow slid 81.72 points or 0.5 percent to 18,132.70, the Nasdaq fell 24.36 points or 0.5 percent to 4,963.53 and the S&P 500 dropped 6.24 points or 0.3 percent to 2,104.50.

For the week, the major averages turned in a mixed performance. The Nasdaq crept up by 0.2 percent, while the Dow edged down by less than a tenth of a percent and the S&P 500 slipped by 0.3 percent.

The weakness that emerged on Wall Street may partly have reflected profit taking following recent strength, which lifted the Dow and the S&P 500 to record closing highs.

Some analysts have been questioning whether the markets can sustain the upward move in light of expectations for an interest rate hike in the relatively near term.

Traders were also digesting a slew of U.S. economic data, including a Commerce Department report showing a downward revision to the pace of economic growth in the fourth quarter.

The report said U.S. gross domestic product increased by a downwardly revised 2.2 percent in the fourth quarter compared to the previously reported 2.6 percent growth. The growth represents a notable slowdown from the 5.0 percent jump seen in the third quarter.

Despite the downward revision, the pace of GDP growth during the fourth quarter still came in slightly above economist estimates for a 2.1 percent increase.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the U.S. economy remains stuck in the 2.25-2.5% range as productivity growth remains well below the long term average."

Meanwhile, the National Association of Realtors released a report showing that pending home sales climbed to best level in eighteen months in January.

NAR said its pending home sales index jumped 1.7 percent to 104.2 in January after falling 1.5 percent to an upwardly revised 102.5 in December. With the increase, the index reached its highest level since August of 2013.

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.

The University of Michigan also released a report showing that U.S. consumer sentiment deteriorated by less than previously estimated in the month of February.

Sector News

While many of the major sectors ended the day showing only modest moves, significant weakness was visible among airline stocks. Reflecting the weakness in the airline sector, the NYSE Arca Airline Index dropped by 1.8 percent.

Brazilian airline GOL (GOL), United Continental (UAL), and Delta (DAL) turned in some of the sector's worst performances.

Internet, biotechnology, and natural gas stocks also moved to the downside on the day, although selling pressure was somewhat subdued.

On the other hand, gold stocks saw considerable strength, driving the NYSE Arca Gold Bugs Index up by 1.5 percent. The strength in the sector came as gold for April delivery rose $3 to $1,213.10 an ounce.

Notable strength also emerged among oil service stocks, which moved higher along with the price of crude oil. Crude for April delivery jumped $1.59 to $49.76 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Friday. Japan's Nikkei 255 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index fell by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the German DAX Index and the French CAC 40 Index advanced by 0.7 percent and 0.8 percent, respectively.

In the bond market, treasuries showed a lack of direction for much of the session before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.002 percent.

Looking Ahead

Economic data may be in focus next week, with traders likely to keep a close eye on the monthly jobs report due next Friday.

Ahead of the jobs data, trading could be impacted by reports on personal income and spending, manufacturing and service sector activity, and labor productivity.