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US shares close firmer after uneventful pre-holiday trading

Last updated: 21:20 23 Dec 2016 GMT, First published: 09:04 23 Dec 2016 GMT

Hot air balloon promoting University of Michigan

US shares ended firmer on Friday after the lead tickers toggled with relatively flat positions throughout the session.

The Dow Jones Industrial Average closed at around its highest point of the session, up 0.07% at 19,933, having failed to make any impression on hitting a record peak of 20,000.

Meanwhile, the S&P 500 market bellwether closed up 0.13% at 2263, barely any higher than where it began the week, and led by Williams Companies (NYSE:WMB) up 4.1% at $31.54, followed by Dun & Bradstreet Corp (NYSE:DNB) up 3.7% at $123.26 and Thursday laggard Red Hat Inc (NYSE:RHT) up 3.4% to $71.01.

The S&P Midcap 400 closed up 0.2% at 1673 and led by Prestige Brand Holdings (NYSE:PBH) up 5.6% at $51.46.

As so often this year, it was the small-caps which outperformed. Friday was no exception, with the S&P SMallcap 600 up 0.5% at 844 and led by Eagle Pharmaceutical (NASDAQ:EGRX), up 7.1% at $80.96. However, the S&P 600 was flat on the week.

The oil market, which often buoys the bourse, certainly helped. Initially, oil prices were lower, but later in the session the price of both the US and Brent Crude Oil went up by 0.2%, to $52.23 and $55.16 respectively.

In data, there was some cheer too.

New home sales jumped 5.2% last month to the highest rate since July, the latest sign of strength for the American housing market.

New-home sales clocked in at an annualised pace of 592,000 units last month, up from 563,000 the month prior and easily beating Wall Street estimates of 575,000.

The University of Michigan’s closely-watched index of consumer sentiment hit 98.2 this month, a sharp jump from the 93.8 recorded last month and the 92.6 reported from the year ago period. It was above forecast at 98.0.

The election of Donald Trump has sent consumer confidence surging to its highest point since January 2004.

The US bourse will be closed on Dec. 26 on account of Christmas Day falling on Sunday. US markets resume as normal on Tuesday, Dec. 27.


Early trading

US stocks opened softer on Friday but have since edged higher with gains by banks as the three top benchmarks fight to hold onto their weekly gains amidst a week of geopolitical developments which favoured government bonds.

Markets brushed off news that an internal Libyan passenger flight had been diverted to Malta and that gunmen were holding hostages. In addition to the assassination of the Russian ambassador to Turkey in Ankara, a Berlin truck attack on a Christmas market, shootings in Zurich, as well as news that Australian police foiled a terror plot set for Christmas Day, it has been a difficult tread for investors.

The Dow Jones Industrial Average was up 0.01% at 19,920, with little prospect of hitting a record 20,000 this shortened session, but remained on track to notch its seventh successive weekly gain - its longest winning run in two years. It was led higher by credit card operators Visa Inc (NYSE:V) up 0.7% at $78.45 and American Express (NYSE:AXP) up 0.7% to $75.13. Goldman Sachs (NYSE:GS) was third, up 0.6% to $241.61.

Banks gained after news that the Department of Justice had reduced the fines on Germany’s Deutsche Bank (NYSE:DB) and Switzerland’s (NYSE:CS.Credit Suisse up 0.5% to $25.53.

The S&P 500 market bellwether was flat at 2261 but also rising from earlier depths and led by Southwestern Energy Company (NYSE:SWN) up 1.5% to 11.25..

But the biggest gainer was software group Red Hat (NYSE:RHT), one of the big fallers this week, which jumped 3.3% to $70.94.

Business services group Dun & Bradstreet Corp (NYSE:DNB) was another gainer up 3% to $122.46.

Meanwhile, the tech-heavy Nasdaq Composite rose 0.08% to 5451.

But where there were gains these were on thin volumes and the top of the league shuffled often through the session.

The S&P Midcap 400 was firmer by 0.06% to 1670 and led by Prestige Brand Holdings (NYSE:PBH) up 4.6% to $50.99.

Retailers fared well in the S&P 500 and S&P 400, with Gap (NYSE:GPS), Nordstrom (NYSE:JWN) and Fossil (NASDAQ:FOSL) all among the top risers. Gap gained 1% to $22.69, Nordstrom up 1.6% to $49.02 and Fossil up 1.6% to $26.65.

The S&P Smallcap 600 gained 0.1% to 841 and led by the aptly named Titan International Inc (NYSE:TWI), up 4.4% to $11.51 after Aegis Capital initiated coverage on Titan with a Buy rating and a price target of $15.00.

A measure of US new-home sales jumped 5.2% in November to the highest rate since July, the latest sign of strength for the American housing market. Some 592,000 homes – above the forecast 575,000 and the rate of growth had been estimated at just 2.1%. It’s likely to bring some cheer to property tycoon turned US President Donald Trump.

In other data, the University of Michigan Consumer Sentiment index came is at 98.2, above a forecast 98.0 as the US economic recovery gathered pace in December.

Meanwhile, Canada’s surprised shock economic contraction was an essay in how frail oil-induced recoveries can be. The Canadian economy shrank for the first time in five months in October. Gross domestic product contracted 0.3% last month from the prior month, said Statistics Canada on Friday, and a sharp reversal of growth in September.


Pre-Open

US stocks are expected to open softer on Friday before the long holiday weekend.

On Thursday it was evident to any investors out there who still had open positions that the Dow Jones Industrial Average was certain not to spike to a record 20,000 and had to settle for about 13 points beneath that struck midweek.

The Dow, which has hovered just below the 20,000 mark for nearly two weeks, is again seen heading lower, by 0.08%, at the opening, as is the S&P 500 market bellwether.

The tech-heavy Nasdaq Composite index was indicated opening 0.1% lower, underperforming the other leading tickers.

Banks are expected to set the scene, and with a series of mixed news it is no wonder Wall Street may struggle to see any upside.

On the upside, Deutsche Bank (NYSE:DB) and Credit Suisse (NYSE:CS.)

Deutsche Bank's deal is worth $7.2bn – barely more than half of what they were asked to pay in October - while Credit Suisse said its tentative settlement is worth $5.3bn.

Now the negative news. A federal lawsuit was launched on Thursday accusing British bank Barclays (NYSE:BCS) of defrauding investors who bought mortgage securities ahead of the financial crisis.

But unlike Deutsche Bank shares which rose 2% earlier and were last seen up 0.9% at $18.70 pre-market as investors demonstrate relief the settlement costs weren't higher, and Credit Suisse shares which earlier rose elatedly but are now down 0.7% at $14.83 Barclays shares dipped by 1% in London and indicated to open 0.3% lower at $11.04 on Wall Street after the bank chose to come out fighting and accused regulators of being “disconnected from the facts”. Safe to say that won’t help any efforts to renegotiate down any future fine that might follow.

Talking of fights, shares in Lockheed Martin (NYSE:LMT) are tumbling 2.4% to $246.70 before the bell after President-elect Donald Trump picked a fight with the company in a tweet on Thursday,

Trump said the Pentagon's costly new F-35 Joint Strike Fighter, made by Lockheed Martin could be replaced with a modified version of a less expensive plane, the F/A-18 Super Hornet, which is made by aerospace rival Boeing (BA).

The University of Michigan's consumer sentiment index for December is due at 1000 ET (1500 GMT).

Consumer spending is the juggernaut that powers the U.S. economy, so it's important that American consumers are feeling confident and happy. The final reading for the December index is forecast to be 98.0, same as in November.

Also at 1000 ET, the Census Bureau is set to release its November new home sales report. New home sales are forecast to be 575,000 in November, up from 563,000 the previous month.

Meanwhile, the weekly Baker Hughes oil rig count is due at 1300 ET (1800 GMT), after the closing bell.

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