Major U.S. benchmarks ended the last trading session ahead of Christmas holiday on a positive note as investors continued to cheer Trump's promises. Encouraging economic data also played a vital role in boosting stocks on Friday. While healthcare sector emerged as the biggest gainer, decline in consumer discretionary stocks weighed on markets. Meanwhile, thin trading volumes ahead of the Christmas weekend prevented the Dow from hitting the key psychological level of 20,000. Separately, all the three benchmarks ended the week in positive territory, with the Dow achieving this distinction for the seventh-straight week.
The Dow Jones Industrial Average (DJI) rose nearly 0.1%, to close at 19,933.81. The S&P 500 gained more than 0.1% to close at 2,263.79. The tech-laden Nasdaq Composite Index closed at 5,462.69, increasing 0.3%. The fear-gauge CBOE Volatility Index (VIX) increased 0.1% to settle at 11.44. A total of around 4 billion shares were traded on Friday, significantly lower than the last 20-session average of 7.4 billion shares. Advancers outpaced declining stocks on the NYSE. For 57% stocks that advanced, 39% declined.
Major Factors Behind Friday's Gains
Continued optimism regarding Trump's promises played a major role in helping the benchmarks to end in the green on Friday. Growing speculations that President-elect Donald Trump's policies, which include possible tax cuts and deregulations, would stir up growth and inflation continued to boost investor sentiment. These broad based gains led the Health Care Select Sector SPDR (XLV) to rose nearly 0.8% and emerge as the biggest gainer among broader S&P 500 sectors. Key components including Vertex Pharmaceuticals Incorporated ( VRTX ), Allergan plc ( AGN ) and Regeneron Pharmaceuticals, Inc. ( REGN ) increased 3.2%, 2.6% and 2.5%, respectively.
However, the Consumer Discretionary Select Sector SPDR (XLY) declined 0.2% and was the biggest loser among the S&P 500 sectors. Key holdings from the sector including Lowe's Companies, Inc. ( LOW ), Amazon.com, Inc. ( AMZN ) and Comcast Corporation ( CMCSA ) declined 1%, 0.8% and 0.5%, respectively. While Amazon and Comcast currently posses a Zacks Rank #3 (Hold), Lowe's currently holds a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, encouraging economic data also helped to boost investor confidence. According to the U.S. Department of Commerce, new single-family houses sales jumped 5.2% to hit the second highest seasonally adjusted annual rate of 592,000 since 2008. It also came in above the consensus estimate of 578,000. Moreover, the University of Michigan reported that its consumer sentiment index rose this month to a 12-year high level of 98.2, which was also higher than the preliminary reading of 98. However, it came in slightly lower than the consensus estimate of 98.3.
The Dow, S&P 500 and Nasdaq gained 0.5%, 0.3% and 0.5%, respectively, over the past week. Trump induced rally was the primary reason behind last week's gains. Meanwhile, solid housing data and better-than-expected expansion in the U.S. economy during third quarter also boosted stocks throughout the week. However, economic data including initial claims and durable orders came in discouraging. Also, geopolitical concerns including murder of Russian ambassador to Turkey, Andrey Karlov, and some doubts over Trump's promises dampened investor sentiment. Trading volume remained more or less light throughout the week.
Stocks That Made Headlines
The U.S. energy behemoth Chevron Corporation ( CVX ) recently reported that its wholly-owned affiliates have signed an agreement to divest its Indonesian and Philippines Geothermal assets to Star Energy Consortium. ( Read More )
Legal matters continue to make headlines for U.K.-based Barclays PLC ( BCS ). The U.S. Department of Justice (DoJ) has sued the bank for alleged mortgage mishandlings. The company's two former executives have also been sued. ( Read More )
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