U.S. Stocks Mostly Flat After Dramatic Swings

By Avantika Chilkoti 

U.S. stocks were little changed Friday, following a week of dramatic swings on Wall Street that capture the uncertainty gripping investors heading into 2019.

The Dow Jones Industrial Average rose 38 points, or 0.2%, to 23179, after storming back to a record rebound Thursday. The S&P 500 rose 0.2% and the Nasdaq Composite slipped 0.1%. All three major U.S. indexes are up at least 3% this week, on course to snap a three-week losing streak. Despite the gains, the blue-chip index and S&P 500 are on pace for their worst December since 1931.

The holiday period has been defined by wild market swings, with U.S. stocks slumping Thursday before staging a dramatic comeback just before markets closed. The Dow swung from an intraday 2.7% fall to close 1.1% higher.

In Friday's action, nine of the 11 sectors in the S&P 500 were higher, led by gains in defensive-oriented sectors including consumer staples and real estate. Technology and industrial shares were mildly lower.

Tesla shares rose 3% after the electric auto maker named a pair of new independent directors -- including Oracle Chairman Larry Ellison and Kathleen Wilson-Thompson, the global head of human resources for Walgreens Boots Alliance, to a board that has been under fire for its oversight of chief executive Elon Musk.

Despite the rally late this week, analysts remain cautious about the prospects for equity markets into the new year.

"Investors continue to be worried by the economic outlook," said Charles St Arnaud, senior investment strategist at Lombard Odier Investment Managers. He also pointed to a string of news from Washington that has created uncertainty for investors, including President Trump's complaints about the U.S. Federal Reserve, just as thin trading exaggerates market moves.

Top of mind in the U.S. this week is the partial government shutdown, which is expected to continue into January as the issue of funding a wall on the border with Mexico cleaves further open a partisan split in Congress.

"The U.S. economic data is not great and there is no reason to believe it will improve," said Jan Dehn, head of research at Ashmore Group, an emerging-market investment manager.

"I expect U.S. stocks to have a tough time in 2019 and this sudden bounce on low volume is a great opportunity to offload in case you missed it earlier," he said.

Concerns that the U.S. economy is set for a slowdown have weighed on markets in recent months, as the effects of President Trump's tax reforms wear off and the U.S. central bank tightens monetary policy.

Equity markets rallied earlier this year, led by the technology sector, but those gains have been reversed in the final three months of the year. The S&P 500 and the Dow industrials this quarter are down 15% and 13%, respectively.

There have been few havens for investors, with gold, international bonds and cash equivalents all offering paltry returns.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was down 0.3%.

The 10-year U.S. Treasury yield rose to 2.766%, from 2.744% on Thursday. Yields move inversely to prices.

Elsewhere, the Stoxx Europe 600 added 2%. In Asia, Hong Kong's Hang Seng Index rose 0.1% and China's Shanghai Composite gained 0.4%.

--Jessica Menton contributed to this article.

Write to Avantika Chilkoti at [e-mail]

(END) Dow Jones Newswires

December 28, 2018 10:17 ET (15:17 GMT)

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