Major Averages Close Mixed For Second Straight Day

(RTTNews) - Following the mixed performance seen in the previous session, the major U.S. stocks averages once again closed on opposite sides of the unchanged line on Friday. The Dow recovered from an early slide to close modestly higher, while the Nasdaq and S&P 500 remained in negative territory.

While the Dow rose 47.11 points or 0.2 percent to 30,046.37 after falling by nearly 180 points in early trading, the Nasdaq dipped 27.94 points or 0.2 percent to 12,377.87 and the S&P 500 edged down 4.64 points or 0.1 percent to 3,663.46.

For the week, the Dow and the Nasdaq slid by 0.6 percent and 0.7 percent, while the S&P 500 slumped by 1 percent.

The uptick by the Dow was partly due to a strong gain by shares of Disney (DIS), with the entertainment giant spiking by 13.5 percent.

The jump by Disney came as the company forecast strong subscriber growth for Disney+ and announced an increase in the price of the streaming service.

The modestly lower close by the broader Nasdaq and S&P 500 came as lawmakers in Washington remain at an impasse over a new fiscal stimulus bill.

The Senate managed to pass a temporary spending bill to prevent a government shutdown on Saturday, but the lack of a breakthrough on a new relief package has raised concerns among traders.

Despite prolonged negotiations, Republicans and Democrats remain at odds over issues such as aid for state and local governments and unemployment assistance.

Selling pressure was relatively subdued, however, as traders also reacted to more upbeat news regarding a potential coronavirus vaccine.

On Thursday, an FDA advisory committee voted in support of the coronavirus vaccine developed by Pfizer (PFE) and BioNTech (BNTX).

FDA Commissioner Stephen Hahn subsequently said the agency will rapidly work toward finalization and issuance of an emergency use authorization.

In U.S. economic news, the University of Michigan released a report showing an unexpected improvement in consumer sentiment in the month of December.

The report said the consumer sentiment index climbed to 81.4 in December from 76.9 in November. The increase surprised economists, who had expected the index to edge down to 76.5.

Surveys of Consumers chief economist Richard Curtin said the unexpected improvement in consumer sentiment was due to a partisan shift in economic prospects.

"Following Biden's election, Democrats became much more optimistic, and Republicans much more pessimistic, the opposite of the partisan shift that occurred when Trump was elected," said Curtin.

Curtin called it "surprising" that the recent resurgence in coronavirus infections and deaths was overwhelmed by partisanship.

Sector News

Airline stocks turned in some of the market's worst performances on the day, resulting in a 2.9 percent nosedive by the NYSE Arca Airline Index.

Significant weakness was also visible among oil service stocks, as reflected by the 1.7 percent drop by the Philadelphia Oil Service Index. The index ended the previous session at its best closing level in nine months.

The pullback by oil service stocks came amid a modest decrease by the price of crude oil, with crude for January delivery slipping $0.21 to $46.57 a barrel.

Steel stocks also gave back ground after moving sharply higher on Thursday, with the NYSE Arca Steel Index falling by 1.4 percent after ending the previous session at a two-year closing high.

Banking, natural gas and semiconductor stocks also saw notable weakness on the day, while some strength emerged among networking and software 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 0.4 percent, while South Korea's Kospi advanced by 0.9 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index tumbled by 1.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both slid by 0.8 percent.

In the bond market, treasuries closed modestly higher, extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.5 basis points to 0.893 percent.

Looking Ahead

Traders are likely to keep a close eye on developments in Washington next week, although reports on industrial production, retail sales, homebuilder confidence and housing starts may also attract attention.

While the Federal Reserve is also scheduled to hold a monetary policy meeting, the central bank is widely expected to leave interest rates unchanged for the foreseeable future.