US STOCKS-Wall Street rally pauses, but stocks mint weekly gain

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* Another choppy session to end wild trading week

* Indexes snap three straight weeks of losses

* U.S. pending home sales fall unexpectedly in November

* Dow down 0.33 pct, S&P 500 down 0.12 pct, Nasdaq up 0.08pct (Updates to close of U.S. market)

By Lewis Krauskopf

Dec 28 (Reuters) - The S&P 500 ended marginally lower in achoppy session on Friday, but major indexes posted weekly gainsfor the first time in December following a wild few days oftrading that saw equities rebound from a prolonged slide.

Major indexes moved in and out of positive territory duringthe day, action that was emblematic of recent volatility thoughlacking the huge swings of the past week. The Dow finishedmodestly lower, while the Nasdaq eked out a slight gain.

With the year coming to an end, investors will be watchingkey U.S. economic reports next week, including on manufacturingand employment.

"It's just maybe nervousness ... with another short weekcoming up," said Bucky Hellwig, senior vice president at BB&TWealth Management in Birmingham, Alabama. "There's a lot ofpotential for moves one way or the other. We have got a lot ofdata coming in next week."

Thursday's trading was marked by a stunning reversal late inthe session to build on a rally that started on Wednesday withthe biggest single-day percentage gains for the indexes innearly a decade.

The week started off with Wall Street's worst-ever ChristmasEve drop, pushing the S&P 500 to within a whisker of bear marketterritory.

"The market does seem to be forming a tradeable bottom,"said Michael Arone, chief investment strategist at State StreetGlobal Advisors in Boston. "In the last few days and evenincluding today, you are seeing investors come in and startingto look for some bargains."

The Dow Jones Industrial Average .DJI fell 76.42 points,or 0.33 percent, to 23,062.40, the S&P 500 .SPX lost 3.09points, or 0.12 percent, to 2,485.74 and the Nasdaq Composite .IXIC added 5.03 points, or 0.08 percent, to 6,584.52.

For the week, the S&P 500 rose 2.86 percent, the Dow added2.75 percent, and the Nasdaq gained 3.97 percent.

Even so, the S&P 500 was on track to drop more than 9percent in December, its biggest monthly percentage declinesince February 2009, during the throes of the financial crisis.

Concerns about trade tensions between the United States andChina, instability in Washington as underscored by the partialfederal government shutdown, and slowing U.S. corporate profitgrowth continue to worry investors heading into 2019.

But the recent slide in stocks means valuations are morereasonable, while some market watchers said this week that WallStreet was becoming more confident about the Federal Reserve'sapproach to interest rate policy and monetary tightening.

"Investors are beginning to price in the fact that theybelieve the Fed will raise rates at a much slower pace in 2019,"Arone said.

The rebound in stocks this week comes as investors may berotating into equities from bonds. U.S. fund investors added$5.2 billion to equity funds in the first net positive flows forsuch funds this month, while bonds funds saw $8.3 billion inoutflows, according to Lipper data for the latest weekly period.

Contracts to buy previously owned homes fell unexpectedly inNovember, the National Association of Realtors said, the latestsign of weakness in the U.S. housing market.

In corporate news, Tesla IncTSLA.O shares jumped 5.6percent after the electric carmaker named Oracle CorpORCL.N co-founder Larry Ellison to its board, in response to a demandby U.S. regulators for independent oversight of companymanagement.

Dell Technologies IncDELL.N returned to public markets,nearly six years after the company's founder and chiefexecutive, Michael Dell, took it private.

Advancing issues outnumbered declining ones on the NYSE by a1.97-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and no new lows; theNasdaq Composite recorded six new highs and 90 new lows.

About 8 billion shares changed hands in U.S. exchanges,below the 9.2 billion-share daily average over the last 20sessions. (Additional reporting by Chuck Mikolajczak and Trevor Hunnicuttin New York, Medha Singh in Bengaluru; editing by Steve Orlofskyand Jonathan Oatis) ((; 646-223-6082; ReutersMessaging:,Twitter: @LKrauskopf))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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