Nike falls after results
U.S. stocks edged lower on Friday, as investors found few reasons to keep pushing shares higher with major indexes trading near records and on track for their fifth straight weekly advance.
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Trading was light going into the Christmas holiday; markets will be closed on Monday, while most European markets will also be closed on Dec. 26. In addition, a round of economic data came in roughly in line with expectations, failing to provide investors with much reason to adjust their views on the economy.
Read: When do financial markets close for Christmas? (http://www.marketwatch.com/story/when-do-financial-markets-close-for-christmas-2017-12-20)
What are markets doing?
The Dow Jones Industrial Average fell 41 points to 24,742, a decline of 0.2%. The S&P 500 slipped 4 points to 2,681, a decline of 0.2%. The Nasdaq Composite Index was off 13 points, or 0.2%, to 6,952.All three indexes are within 1 percentage point of record levels.
For the week the Dow is up 0.4%, the S&P has gained 0.2% and the Nasdaq is up 0.2%. Both the Dow and the S&P are on track for their fifth straight weekly advance.
What's driving the markets?
The gains this week have in part come after the House of Representatives and the Senate approved a sweeping tax reform package, cutting the corporate tax rate to 21% from 35%, among other things. Trump signed the bill into law (http://www.marketwatch.com/story/trump-today-president-says-corporations-going-wild-as-he-signs-tax-bill-into-law-2017-12-22) on Friday.
Expectations related to tax cuts boosted markets in recent weeks on hopes it will give U.S. companies a boost and speed up economic growth. However, Morgan Stanley recently warned that the official passage of the bill could represent a near-term top for market (http://www.marketwatch.com/story/heres-why-the-stock-market-could-peak-the-day-trump-signs-the-tax-cut-bill-2017-12-18).
Meanwhile in Europe, Spanish stocks slumped after parliamentary elections in Catalonia handed a win to the separatist movement (http://www.marketwatch.com/story/spanish-stocks-slump-after-separatists-win-catalonia-election-2017-12-22), rekindling fears of the re-emergence of tensions in Spain. The iShares MSCI Spain Capped ETF (EWP), an exchange-traded fund that tracks Spain's equity market, fell 0.9%.
What's on deck in economics?
Orders for durable goods rose 1.3% in November (http://www.marketwatch.com/story/durable-goods-orders-rise-13-in-november-2017-12-22). While this represented an improvement after a 0.4% drop in the prior month, it was below the 2% growth that analysts had been expecting. Separately, consumer spending rose 0.6% in November (http://www.marketwatch.com/story/consumer-spending-jumps-06-in-november-savings-rate-declines-2017-12-22), while personal income was up 0.3%.
After the market opened, the University of Michigan reported consumer sentiment continued to drift lower in December (http://www.marketwatch.com/story/consumer-sentiment-continued-to-slowly-sink-in-december-2017-12-22), while new-home sales spiked, easily coming in ahead of forecasts (http://www.marketwatch.com/story/new-home-sales-roar-to-a-fresh-high-as-builders-feed-a-market-starved-for-supply-2017-12-22).
What are strategists saying?
"The data was pretty much in line, albeit a bit soft on personal income and durable goods. There's a little disappointment about that, but this has been a great year and we're in a strong time, seasonally," said Wayne Kaufman, chief market analyst at Phoenix Financial Services.
Kaufman added that trading was likely to be quiet throughout the rest of the year, barring any unexpected news events. "Some managers may book some profits, but otherwise I don't think we'll drop down, nor rocket higher."
Related: U.S. stock trading volume hit a three-year low in 2017 amid near-absent volatility (http://www.marketwatch.com/story/us-stock-trading-volume-hit-a-three-year-low-in-2017-amid-near-absent-volatility-2017-12-21)
Don't miss:Stock-market volatility could return in a big way in January: Goldman Sachs (http://www.marketwatch.com/story/stock-market-volatility-could-return-in-a-big-way-in-january-goldman-sachs-2017-12-21)
Which stocks are in focus?
Shares of Nike Inc.(NKE) fell 3.1% after the athletic gear company late Thursday reported earnings that topped Wall Street estimates (http://www.marketwatch.com/story/nike-shares-seek-direction-as-results-top-street-estimates-but-north-america-sales-dont-2017-12-21), but North American sales fell below consensus estimates.
Ignyta Inc.(RXDX) jumped 72% on heavy volume after the biotechnology company disclosed that it agreed to a merger (http://www.marketwatch.com/story/ignytas-stock-soars-on-heavy-volume-after-roche-merger-deal-2017-12-22)with Roche Holdings Inc.(ROG.EB)
Papa John's International Inc.(PZZA) was down 3.6% after a report in The Wall Street Journal late Thursday that the pizza chain's founder John Schnatter is stepping down as chief executive (http://www.marketwatch.com/story/papa-johns-founder-to-step-down-as-chief-executive-2017-12-21).
In the same vein, former Google CEO Eric Schmidt said Thursday he will step down as executive chairman (http://www.marketwatch.com/story/eric-schmidt-to-step-down-as-executive-chairman-of-alphabet-2017-12-21-17911113) of the search giant's parent company, Alphabet Inc.(GOOGL) in January. Shares were down 0.1%.
Energy shares rose 0.4% on the day, extending their recent outperformance. The sector is up 4.9% this week, by far the biggest gain of any S&P 500 sector. However, it is also the only sector to be down for 2017, with a decline of 4.3%. Hess Corp.(HES) was up 1.5% while Occidental Petroleum Corp.(OXY) was up 0.9%.
What are other markets doing?
Bitcoin dropped below $11.000, according to CoinDesk (http://www.marketwatch.com/story/bitcoin-prices-slide-another-13-amid-fears-big-investors-are-cashing-out-2017-12-22), before trimming losses to change hands in recent action at $12,952.15--still a 17% decline on the day. The world's largest digital currency has lost more than a third of its value since hitting an all-time high on Dec. 17.
Stocks in Asia closed mostly higher, with Japan's Nikkei 225 index rising 0.2% to 22,902.76.
Oil prices dropped 0.5% to $58.06 a barrel, while gold was up 0.1% at $1.271.60 an ounce.
The ICE dollar index was up 0.1% at 93.379.
(END) Dow Jones Newswires
December 22, 2017 12:37 ET (17:37 GMT)