Stocks Waver in Thin Trade as Year Draws to Close: Markets Wrap

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(Bloomberg) — U.S. stocks swung between gains and losses, with moves exacerbated by thin trading on the last session of the year. Treasuries edged higher while the dollar declined.

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The S&P 500 fluctuated in a narrow range, with volume about half the average over the past 30 days. It’s been a choppy week for markets, with the benchmark pulling back from a record high on Thursday. Modest declines in megacaps like Microsoft Corp., Apple Inc. and Amazon.com Inc. weighed on the Nasdaq 100. Both S&P 500 and Nasdaq 100, however, are up about 27% this year.

Trading was light as investors drew a line under a strong year for global equities as economies recovered from the pandemic. Bond investors are nursing losses as many central banks move toward tighter monetary settings to fight inflation. How the coronavirus and those policy shifts shape economic reopening are key for the outlook.

“If there is one thing that we have learned this year, it is that the U.S. economy has proven to be resilient in the face of pandemic-related challenges,” said Brett Ryan, senior U.S. economist at Deutsche Bank. While omicron and fiscal uncertainty present risks, “the economy would still expand at a well-above-trend pace even if these risks are realized,” he said.

The S&P 500 has been on a tear this year, more than even the most bullish forecast seen by analysts at the start of the year. The benchmark rose to its 70th record close this week just shy of 4,800. That’s a far cry from levels predicted in a January survey, where the top projection was 4,400 and average of 22 estimates was 4,074.

Elsewhere, the dollar was lower against most of its Group-of 10-peers on Friday, while oil declined, paring the biggest annual advance since 2009. Bitcoin rallied for a second session, paring its biggest monthly drop since May to trade around $48,000.

Traders are continuing to monitor China’s struggling property developers. A Chinese state-owned enterprise will take a 29% stake in China South City Holdings Ltd., in the latest sign of the authorities stepping up support for ailing real-estate firms.

The spotlight was also on talks by telephone between U.S. President Joe Biden and Russian President Vladimir Putin. The Kremlin said Putin was satisfied with the outcome of the discussions. The U.S. and its allies have raised alarm over a potential Russian invasion of Ukraine.

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 0.1% as of 11:03 a.m. New York time

  • The Nasdaq 100 fell 0.3%

  • The Dow Jones Industrial Average fell 0.2%

  • The Stoxx Europe 600 fell 0.2%

  • The MSCI World index was little changed

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%

  • The euro rose 0.4% to $1.1365

  • The British pound rose 0.3% to $1.3535

  • The Japanese yen was little changed at 115.12 per dollar

Bonds

  • The yield on 10-year Treasuries declined one basis point to 1.49%

  • Germany’s 10-year yield was little changed at -0.18%

  • Britain’s 10-year yield was little changed at 0.97%

Commodities

  • West Texas Intermediate crude fell 1.2% to $76.08 a barrel

  • Gold futures rose 0.5% to $1,822.90 an ounce

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