Stocks lower as large-cap gains halt
Stocks closed lower Friday as markets followed what has become a pattern at the sputtering end of this fourth-quarter rally: Early gains narrow through the day’s trading and occasionally turn to losses. The major indexes finished the week mixed.
Friday was one of the year’s four “quadruple-witching days,” so called because four kinds of options contracts expire. Historically, the days have meant higher than usual volatility and volume as investors cash in or renew their contracts; in 10 of the last 13 such days, the Dow Jones industrial average has closed higher, according to the “Stock Trader’s Almanac.”
Friday became one of the rare down “witching” days, with the Dow frittering away early, modest advances to turn negative.
Tech stocks drooped, perhaps on recent middling results from the sector’s big names, such as Oracle Corp., which look worse compared to the recent sunny outlooks from industrial companies such as General Electric Co. and Honeywell International Inc.
Still, by afternoon, all the day’s gains were gone. “It looks like the rally we saw from the October bottom until late November is sort of stalled,” said Joseph Sunderman, director of trading at Schaeffer’s Investment Research in Cincinnati.
The Dow Jones industrial average fell 6.08, or 0.06 percent, to 10,875.59.
Broader stock indicators also fell. The Standard & Poor’s 500 index dropped 3.62, or 0.28 percent, to 1,267.32, and the Nasdaq composite index declined 8.15, or 0.36 percent, to 2,252.48.
Crude oil futures fell. A barrel of light crude settled at $58, down $1.93 on the New York Mercantile Exchange.
Bond prices rose, with the yield on the 10-year Treasury note falling to 4.44 percent from 4.47 percent late Thursday. The U.S. dollar was mixed against other major currencies. Gold prices declined.
In economic news, America’s deficit in the broadest measure of international trade showed a slight improvement in the July-September quarter, although it was still at the third-highest level in history. The current account deficit includes not only sales of merchandise and services but also investment flows and foreign aid. The current account deficit must be financed by convincing foreigners to hold more dollars, which they invest in U.S. stocks, bonds and Treasury securities.
Declining issues narrowly led advancers on the New York Stock Exchange, where preliminary consolidated volume was 2.71 billion shares, up from 2.21 billion shares Thursday.
The Russell 2000 index of smaller companies fell 1.65, or 0.24 percent, to 683.09.
Overseas, Japan’s Nikkei stock average fell 0.53 percent. Britain’s FTSE 100 rose 0.66 percent, Germany’s DAX index gained 1.09 percent, and France’s CAC-40 increased 0.67 percent.