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Dec 29, 2016

Wall Street at Close Report on December 29, 2016: U.S. Stocks Close Fractionally Lower

marketwatch.com

Anora Mahmudova, Barbara Kollmeyer


U.S. stocks closed fractionally lower on Thursday as investors remained reluctant to make big bets in a thinly-traded session ahead of long holiday weekend.

Thursday’s moves follow the biggest one-day percentage drop for the S&P 500 since Oct 11.
The S&P 500 SPX, -0.03% closed down less than a point at 2,249.37. Six of the 11 main sectors finished in positive territory, led by utilities and real estate sectors, but the gains were outweighed by losses in financials and energy shares.

The Dow Jones Industrial Average DJIA, -0.07%  closed off 11 points, or less than 0.1%, at 19,821.49. Goldman Sachs Group Inc. GS, -1.03%  and J.P. Morgan Chase & Co JPM, -0.71%  were among the biggest losers on the Dow, finishing 1% and 0.7% lower, respectively.

The Nasdaq Composite COMP, -0.12%  declined 6.47 points, or 0.1%, at 5,432.
All three main indexes are on track to post solid monthly gains and double-digit annual returns with one trading session to go in 2016.


“Markets have already booked solid gains this year, with the S&P 500 up 10%. But extremely low volumes indicate there aren’t many participants to take his market much higher or lower until after the holidays,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
Thursday’s volumes were roughly half of the 30-day average volume, according to FactSet.
See: Why Dow 20,000 isn’t a foregone conclusion in 2016
Ahead of the opening bell, stock-index futures were virtually unchanged after mixed economic data. Weekly jobless claims tumbled to extremely low levels that have been the norm since the summer. Meanwhile, the trade deficit widened by more than expected.
Opinion: Santa seems to be a no-show at the stock market again
Stocks have been rallying on the view that President-elect Donald Trump’s administration will spur economic growth via spending and tax cuts, though there have been concerns that the moves have come too far and too fast. Meanwhile, expectations that inflation will rise as well have pushed up interest rates, and mortgage rates have been jumping in step with that.
“It will be interesting to see how much more the defensive stocks like utilities and REITs will fall and how far up financials will go. The economic background is favorable, but valuations are still a problem for investors,” said Antonelli.
Read: All the important Dow milestones in one chart
Individual movers: Sears Holdings Corp. SHLD, +10.02%  shares SHLD, +10.02% surged 10% after the company said it had obtained a secured standby letter of credit facility, easing liquidity concerns. The stock lost more than half of its value since the start of the year.

Fortress Biotech Inc. FBIO, +20.96%  shares soared 21% to $2.77 after the company reported a breakthrough with a cancer treatment that has suffered of late.

Shares of clinical-stage drug company Cempra Inc. CEMP, -57.38%  plummeted 58%, after the U.S. Food and Drug Administration said it cannot approve a pneumonia drug without additional safety data and improvements at a manufacturing facility.

Other markets: The dollar DXY, -0.56%  was under pressure on Thursday against major rivals, and strength in the Japanese yen USDJPY, +0.02%  contributed to a 1.3% drop for the Nikkei 225 index NIK, -1.32%

Elsewhere, Asian stocks were mixed. Europe SXXP, -0.35%  logged moderate losses, with banking shares under pressure.

WTI oil futures CLG7, -0.39%  declined after government data showed a rise in U.S. crude inventories.

Gold futures GCG7, +1.59%  notched a fourth straight advance Thursday, finishing at a two-week best, settling up $16.80, or 1.5%, to $1,157.70 an ounce in light volume.

U.S. government bonds extended gains Thursday, pulling yields down. The yield on the benchmark 10-year Treasury note TMUBMUSD10Y, -1.42% fell 4.4 basis points to 2.46%