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

(RTTNews) - After trending higher over the past several sessions, stocks showed a lack of direction throughout the trading day on Friday. Despite the choppy trading, the Nasdaq and the S&P 500 ended the day at new record closing highs.

The major averages finished the day on opposite sides of the unchanged line. The Dow edged down 2.67 points or less than a tenth of a percent to 21,080.28, while the Nasdaq inched up 4.94 points or 0.1 percent to 6,210.19 and the S&P 500 crept up 0.75 points or less than a tenth of a percent to 2,415.82.

Even with the roughly flat close on the day, the major averages moved sharply higher of the week. The Nasdaq surged up by 2.1 percent, while the Dow and the S&P 500 jumped by 1.3 percent and 1.4 percent, respectively.

The lackluster performance on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following recent volatility.

While the sell-off seen last Wednesday dragged the major averages down to their lowest levels in nearly a month, the recent winning streak lifted the Nasdaq and the S&P 500 to record highs.

Some traders were also already away from their desks, looking to get a head start on the long Memorial Day weekend.

Traders largely shrugged off the latest economic data, including a report from the Commerce Department showing that the U.S. economy grew by much more than initially estimated in the first three months of the year.

The Commerce Department said gross domestic product climbed by 1.2 percent in the first quarter compared to the previously reported 0.7 percent increase.

Economists had been expecting a more modest upward revision to the pace of GDP growth to approximately 0.9 percent.

ING Senior Economist James Knightley noted the upwardly revised first quarter GDP growth is still poor relative to the majority of other developed markets.

A separate Commerce Department report showed that new orders for manufactured durable goods pulled back by less than expected in the month of April.

The report said durable goods orders slid by 0.7 percent in April after jumping by an upwardly revised 2.3 percent in March. Economists had expected orders to slump by 1.4 percent.

Excluding a drop in orders for transportation equipment, durable goods orders still fell by 0.4 percent in April after climbing by 0.8 percent in March. Ex-transportation orders were expected to rise by 0.4 percent.

Meanwhile, the University of Michigan released revised data showing that consumer sentiment in May was virtually unchanged from the previous month.

Among individual stocks, Deckers Outdoor (DECK) posted a strong gain after the maker of Ugg boots reported an unexpected fourth quarter profit and provided upbeat guidance.

Shares of Nutanix (NTNX) also moved notably higher after the enterprise technology company reported a narrower than expected third quarter loss and offered an upbeat revenue forecast.

Meanwhile, GameStop (GME) came under pressure after the video game retailer reported better than expected first quarter results but disappointed investors by leaving its full-year earnings guidance unchanged.

Sector News

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

Biotechnology stocks saw considerable weakness, however, with the NYSE Arca Biotechnology Index sliding by 1.1 percent. BioCryst Pharmaceuticals (BCRX) pulled back sharply after spiking higher in the previous session on positive trial results.

Trucking and telecom stocks also moved to the downside, while some strength was visible among railroad and electronic storage stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index fell by 0.6 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index closed just below the unchanged line and the German DAX Index dipped by 0.2 percent.

In the bond market, treasuries spent much of the session near the unchanged line before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.250 percent.

Looking Ahead

Following the long holiday weekend, economic data is likely to be in focus next week, with the monthly jobs report expected to be in the spotlight.

Reports on personal income and spending, consumer confidence, pending home sales, and manufacturing activity may also attract attention.

The Federal Reserve is also due to release its Beige Book, which may shed additional light on next month's interest rate decision.