Before The Bell
Wall Street began the penultimate trading day of the year on a positive note, albeit a contained one, as the blue chips strengthened even as the biotech issues, many of which are domiciled on the NASDAQ, struggled. Boosting the Dow Jones Industrial Average, which remained steadfastly in the black throughout the morning, were modest gains in International Business Machines (IBM – Free IBM Stock Report) and Apple (AAPL – Free Apple Stock Report) at the time. In the meantime, commodity prices, which have been rallying, stayed near their highs for 2017. Oil, a key commodity worth watching, also held near its highs, passing hands at just below $60 a barrel in New York trading.
Overall, the day's positive tone, was not abetted by strong volume, as trading remained light, with many individuals active in the stock market being on vacation ahead of the New Year's celebration. Those that were around, though, were buying more than selling. So, as we headed toward the noon hour in New York, the Dow was holding onto a gain just north of 40 points, while the S&P 500 and the NASDAQ were ahead nominally. Meantime, in news out in the morning, the Chicago Purchasing Managers Survey noted that activity had reached its highest level in more than six years.
Little changed as the afternoon commenced, with this light trading day continuing to see the Dow Industrials remain modestly in the black, while the NASDAQ, once lower, also started to firm up. The smaller-cap indexes also began to gain a little traction following a generally weaker opening. Overall, there has not been much of a Santa Claus rally this week, as most of the fireworks were seen earlier in the month, as stocks surged further on expectations, since realized, for tax reform passing. On the whole, though, this has been a historic year for equities, as the bull market, now almost nine years in duration, remained alive and well.
As we moved further into the afternoon, the same pattern persisted, with the Dow staying in the win column, along with the other indexes, if somewhat less so, on this light news day. And on that count, there was little of note to report. To wit, oil eased a touch; Treasury yields ticked up somewhat, with the benchmark 10-year Treasury climbing to a yield just north of 2.43%. Finally, weekly jobless claims, up sharply the week before, settled in unchanged in the latest seven-day stretch, holding at 245,000. Meantime, continuing claims ticked up a bit further.
The market then strengthened as the session drew to a close, with the Dow climbing to a session-best gain on the day of 63 points. Moderate improvements also were noted on the S&P 500 and the NASDAQ, with proportionately stronger gains on the S&P 400 and the Russell 2000, suggesting some broadening out of the late advance. Elsewhere, nine of the ten major equity groups finished ahead on the day, led by a three-quarter of a point advance in the basic materials, while gaining stocks led losing issues by a count of almost two to one on the Big Board.
So, following this broad, but still modest win, that lifted the Dow again past 24,800, the markets now are poised to finish out a strong year for equities. And on this final day of trading, we see that shares in Asia mixed in overnight trading, while in Europe, the major bourses are thus far tracking flat to lower this morning. Meanwhile, oil prices are up, climbing past $60 a barrel in New York and Treasury yields, up yesterday, now are a tad lower in dealings this morning. Finally, U.S. equity futures are moving in a positive direction, at this hour, thus pointing to a higher open when trading resumes.
— Harvey S. Katz, CFA
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
