Spanish Stocks, Bonds Under Pressure After Catalan Vote

Spanish stocks, euro down after Catalan election

-- Equities post biggest weekly outflows since Brexit

-- Bitcoin sheds one-fourth of its market value in 24 hours

U.S. stocks pulled back slightly in a quiet trading session heading into the holiday weekend.

The pause in stock trading comes on the heels of a busy week in Washington. Earlier in the week, the U.S. Senate and the House passed an overhaul of the U.S. tax system. Late Thursday, the U.S. Congress passed a stopgap spending bill to keep the government funded through mid-January, avoiding a shutdown. Major indexes are on track to notch weekly gains, even as some analysts and traders said the tax overhaul was mostly priced into the stock market ahead of the vote.

Still, the S&P 500 is on pace to rise more than 1% in December, marking the ninth consecutive winning month, the longest such streak since 1983.

On Friday, stocks seesawed between slight gains and losses in early trading before trending lower in early afternoon trading. The S&P 500 fell 0.1%, while the Dow Jones Industrial Average slipped 37 points, or 0.2%, to 24745.

"It's holiday trade," said John Brady, managing director at futures brokerage R.J. O'Brien, adding that few traders were opening new bets. "People want to get through today, not create a lot of damage in their portfolios."

Investors withdrew $14.5 billion from stock mutual and exchange-traded funds in the past week, according to EPFR Global data. It was the biggest week of outflows since Britain's vote to leave the European Union.

In Europe, stocks slipped on Friday, with the Stoxx Europe 600 falling 0.1%, weighed down by Spanish stocks as a victory for Catalonia's separatist parties in a regional election sapped some demand for Spanish assets.

Catalonia's separatist parties won a majority in a vote Thursday for a new regional assembly, keeping alive the threat of secession from Spain and opening a period of uncertainty over relations between Catalonia and Madrid.

Spain's benchmark IBEX 35 index declined 1.2% on Friday, with lenders Banco de Sabadell and CaixaBank each falling more than 3%.

Still, many analysts were skeptical the development would maintain pressure on the common currency or meaningfully weigh down European markets. While the results are considered a blow to Spanish Prime Minister Mariano Rajoy, few expect another unilateral independence declaration soon, and there are few signs Spain's growth has been dented in recent months.

"These events are very uncertain and difficult to predict and investors are focused on economic growth and earnings growth," said Jon Adams, investment strategist with BMO Global Asset Management. Among political concerns in Europe, "We're more worried about Italian elections and German coalition talks," he added.

Markets in Hong Kong and Japan closed with gains in thin trading.

During trading in Asia, Bitcoin slumped to $13,200 from $15,800 in barely three hours. Bitcoin has wiped out one-fourth of its market value in the past 24 hours and lost about $121 billion of its total market value in less than a week.

Many of the other big cryptocurrencies also fell significantly, with Bitcoin Cash prices slumping by one-quarter at one point over the past day.

South Korea's Kospi -- one of Asia's worst performers Thursday -- edged up 0.4% after four straight declines. Japan's Nikkei rose 0.2% and Hong Kong's Hang Seng added 0.7%, ending the week with gains.

Lucy Craymer contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

December 22, 2017 13:18 ET (18:18 GMT)