Stocks Close Nearly Flat Following Another Lackluster Session - U.S. Commentary

(RTTNews) - Stocks turned in another lackluster performance on Friday, extending the choppy trading seen over the past few sessions. Despite the lack of direction on the day, the tech-heavy Nasdaq extended its recent upward trend to reach its best closing level in a year.

The major averages closed mixed for the fourth consecutive session. While the Dow slipped 24.11 points or 0.1 percent to 18,432.24, the Nasdaq inched up 7.15 points or 0.1 percent to 5,162.13 and the S&P 500 crept up 3.54 points or 0.2 percent to 2,173.60.

For the week, the Nasdaq jumped by 1.2 percent, while the S&P 500 edged down by 0.1 percent and the Dow fell by 0.7 percent.

The nearly flat close by the markets came as traders digested a slew of catalysts, including the latest batch of earnings news, the Bank of Japan's monetary policy decision and some U.S. economic data.

A notable decline by shares of Exxon Mobil (XOM) weighed on the Dow, with the oil giant slumping by 1.4 percent after reporting weaker than expected second quarter results.

On the other hand, the Nasdaq benefited from a strong gain by Google parent Alphabet (GOOGL), which jumped by 3.3 percent after reporting second quarter results that exceeded estimates.

Amazon (AMZN) also reported second quarter results that were notably ahead of expectations and issued positive third quarter revenue guidance.

Meanwhile, traders were also reacting to the Bank of Japan's monetary policy announcement, which was seen as a disappointment.

While the BoJ announced plans to double its purchases of exchange-traded funds, investors had been expecting more substantial measures.

The Japanese central bank noted that it will also conduct a comprehensive assessment of economic activity and the effectiveness of its monetary policy.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing much weaker than expected economic growth in the second quarter.

The report said gross domestic product climbed by 1.2 percent in the second quarter following a downwardly revised 0.8 percent increase in the first quarter. Economists had expected GDP to jump by 2.6 percent.

Sector News

Despite the lackluster performance by the broader markets, gold stocks showed a substantial move to the upside on the day. The NYSE Arca Gold Bugs Index surged up by 2.1 percent to its best closing level in almost three years.

The rally by gold stocks came amid an increase by the price of the precious metal, with gold for August delivery climbing $16.70 to $1,349 an ounce.

Significant strength was also visible among biotechnology stocks, as reflected by the 1.9 percent gain posted by the NYSE Arca Biotechnology Index. Qiagen (QGEN) posted a standout gain after reporting better than expected second quarter results.

Energy stocks also showed a notable move to the upside, as the price of crude oil for September delivery rose $0.46 to $41.60 a barrel.

Meanwhile, computer hardware stocks saw considerable weakness, dragging the NYSE Arca Computer Hardware Index down by 1.8 percent. The drop by the index came after it ended the previous session at an eight-month closing high.

Western Digital (WDC) led the hardware sector lower after reporting better than expected fourth quarter results but providing disappointing guidance.

Profit taking also contributed to weakness in the housing sector, with the Philadelphia Housing Sector Index falling by 1.7 percent after reaching an eight-year closing high on Thursday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index climbed by 0.6 percent, while Hong Kong's Hang Seng Index slumped by 1.3 percent.

Meanwhile, the major European markets all managed to end the day higher. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index advanced by 0.6 percent.

In the bond market, treasuries showed a notable move to the upside after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.3 basis points to 1.458 percent.

Looking Ahead

Next week's trading may be impacted by reaction to the Bank of England's monetary policy decision due on Thursday.

Earlier this month, the BoE unexpectedly refrained from cutting interest rates but signaled more action next month after policymakers get more assessments on economic growth.

The monthly U.S. jobs report is also likely to attract attention next week along with reports on manufacturing activity, personal income and spending, and international trade.

On the earnings front, Aetna (AET), Procter & Gamble (PG), Pfizer (PFE), Electronic Arts (EA), Office Depot (ODP), Time Warmer (TWX), Kellogg (K), and Kraft Heinz (KHC) are among the companies due to report their quarterly results next week.