U.S. Stocks Close Mixed Following Lackluster Session

Following the pullback seen in the previous session, stocks showed a lack of direction over the course of the trading day on Friday. The major averages spent the day bouncing back and forth across the unchanged line before closing mixed.

While the Dow dipped 62.76 points or 0.2 percent to 26,671.95, the Nasdaq climbed 29.36 points or 0.3 percent to 10,503.19 and the S&P 500 rose 9.16 points or 0.3 percent to 3,224.73.

The major averages also turned in a mixed performance for the week, as the tech-heavy Nasdaq slumped by 1.1 percent but the S&P 500 jumped by 1.2 percent and Dow surged up by 2.3 percent.

The choppy trading on Wall Street came as traders generally remain optimistic about the economic outlook but can’t ignore the troubling headlines on the coronavirus front.

The U.S. reported a record 77,255 new coronavirus cases on Thursday, according to data compiled by Johns Hopkins University.

Reflecting the widespread resurgence of the coronavirus, the University of Michigan released a report showing an unexpected deterioration in U.S. consumer sentiment in the month of July.

The preliminary report said the consumer sentiment index tumbled to 73.2 in July after jumping to 78.1 in June. The pullback surprised economists, who had expected the index to inch up to 79.0.

With the unexpected decrease, Surveys of Consumers chief economist Richard Curtin noted the index is “insignificantly” above the nearly nine-year low set in April.

“Following the steepest two-month decline on record, it is not surprising that consumers need some time to reassess the likely economic impact from the coronavirus on their personal finances and on the overall economy,” Curtin said.

He added, “Unfortunately, declines are more likely in the months ahead as the coronavirus spreads and causes continued economic harm, social disruptions, and permanent scarring.”

A steep drop by shares of Netflix (NFLX) also weighed on the markets, with the video streaming giant plunging by 6.5 percent.

The sell-off by Netflix came after the company reported second quarter earnings that missed analyst estimates and forecast weaker than expected subscriber growth.

Sector News

Despite the lackluster performance by the broader markets, gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.2 percent to its best closing level in over seven years.

The rally by gold stocks came amid an increase by the price of the precious metal, with gold for August delivery climbing $9.70 to $1,810 an ounce.

Significant strength was also visible among utilities stocks, as reflected by the 2.4 percent spike by the Dow Jones Utilities Average. The average ended the session at its best closing level in over a month.

Networking stocks also showed a strong move to the upside on the day, resulting in a 2.3 percent jump by the NYSE Arca Networking Index, which also reached a one-month closing high.

On the other hand, banking stocks moved sharply lower over the course of the session, dragging the KBW Bank Index down by 2.5 percent.

Airline stocks also came under pressure, extending the sharp pullback seen in the previous session and resulting in a 1.9 percent slump by NYSE Arca Airline Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, but Japan’s Nikkei 225 Index bucked the uptrend and slipped by 0.3 percent. China’s Shanghai Composite Index inched up by 0.1 percent, while Australia’s S&P/ASX 200 Index rose by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index fell by 0.3 percent, the German DAX Index climbed by 0.4 percent and the U.K.’s FTSE 100 Index advanced by 0.6 percent.

In the bond market, treasuries closed modestly lower after showing a lack of direction in morning trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.6 basis points to 0.628 percent.

Looking Ahead

The economic calendar for next week is relatively quiet, although traders are likely to keep an eye on the weekly jobless claims report as well as data on new and existing home sales.

Earnings news may take the spotlight, with IBM Corp. (IBM), Coca-Cola (KO), Microsoft (MSFT), AT&T (T), Twitter (TWTR), and Intel (INTC) among a slew of companies due to report their quarterly results next week.

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