December 26, 2017

by | Dec 26, 2017 | Daily Market Blog, Daily Market Notes

U.S. stocks closed lower on light volume in the first session following the Christmas holiday break and the final trading week of the year. Reports suggesting that Dow member Apple lowered its iPhone X sales outlook hamstrung the tech sector. Treasury yields finished mixed and the U.S. dollar dipped to extend its recent decline. Home prices topped forecasts and regional manufacturing reports were mixed. Crude oil prices rallied on reports of a Libyan pipeline explosion and gold traded higher.

The Dow Jones Industrial Average (DJIA) declined 8 points to 24,746, the S&P 500 Index was 3 points (0.1%) lower at 2,681, and the Nasdaq Composite lost 24 points (0.3%) to 6,936. In light volume, 527 million shares were traded on the NYSE and 1.3 billion shares changed hands on the Nasdaq. WTI crude oil increased $1.50 to $59.97 per barrel and wholesale gasoline gained $0.02 to $1.79 per gallon. Elsewhere, the Bloomberg gold spot price moved $8.65 higher to $1,282.81 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.1% lower at 93.26.

Home prices rise more than expected, regional manufacturing reports mixed. The 20-city composite S&P CoreLogic Case-Shiller Home Price Index showed a 6.4% year-over-year (y/y) gain in home prices in October, versus the Bloomberg expectation of a 6.3% gain. Month-over-month (m/m), home prices were up 0.7% on a seasonally adjusted basis for October, above forecasts calling for a 0.6% rise.

The Dallas Fed Manufacturing Activity Index rose more than expected to highs not seen since 2006, improving to 29.7 in December, from 19.4 in November, and versus forecasts of a slight increase to 20.0.

Treasury yields were mixed after last week’s rally and the U.S. dollar remained under modest pressure, while the stock markets slipped from record highs as of late. These movements developed as the most sweeping tax overhaul in decades was signed into law last week.

Schwab Center for Financial Research – Market Analysis Group

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