U.S. Stocks Close Mixed Ahead Of Next Week's Fed Meeting

(RTTNews) - After moving in opposite directions early in the session, the major U.S. stocks indexes continued to turn in a mixed performance throughout the trading day on Friday. While the tech-heavy Nasdaq climbed to a new record closing high, the Dow moved back to the downside.

The Nasdaq ended the session off its best levels of the day but still closed up 98.03 points or 0.4 percent at 22,141.10. The Dow, on the other hand, slid 273.78 points or 0.6 percent to 45,834.22 and the S&P 500 edged down 3.18 points or 0.1 percent to 6,584.29.

Despite the mixed performance on the day, the major averages all posted strong gains for the week. The Nasdaq surged by 2.0 percent, the S&P 500 shot up by 1.6 percent and the Dow jumped by 1.0 percent.

The mixed performance on Wall Street came as traders looked ahead to the Federal Reserve's monetary policy announcement next Wednesday.

With recent data showing relatively subdued inflation and a weakening labor market, the Fed is widely expected to lower interest rates by at least a quarter point.

CME Group's FedWatch Tool is currently indicating a 96.4 percent chance the Fed will cut rates by 25 basis points and a slim 3.6 percent chance of a half-point rate cut.

Traders are likely to pay close attention to the Fed's accompanying statement as well as Fed Chair Jerome Powell's post-meeting comments for clues about the likelihood of further rate cuts.

Currently, the Fed is widely expected to lower rates by another 25 basis points at both its October and December meetings, although Powell is likely to say future rate cuts will depend on incoming economic data.

In U.S. economic news, preliminary data released by the University of Michigan showed consumer sentiment in the U.S. has deteriorated by much more than anticipated in the month of September.

The University of Michigan said its consumer sentiment index fell to 55.4 in September from 58.2 in August. Economists had expected the index to edge down to 58.0.

On the inflation front, year-ahead inflation expectations held steady at 4.8 percent, while long-run inflation expectations rose for the second straight month, jumping to 3.9 percent in September from 3.5 percent in August.

Sector News

Biotechnology stocks showed a substantial move to the downside on the day, with the NYSE Arca Biotechnology Index tumbling by 2.5 percent after ending Thursday's trading at its best closing level in seven months.

Considerable weakness was also visible among networking stocks, as reflected by the 2.3 percent slump by the NYSE Arca Networking Index. The index gave back ground after finishing the previous session at a record closing high.

Housing stocks also saw significant weakness on the day, moving notably lower along with airline, healthcare and pharmaceutical stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index shot up by 1.2 percent.

Meanwhile, European stocks ended the day roughly flat. While the U.K.'s FTSE 100 Index dipped by 0.2 percent, the French CAC 40 Index and the German DAX Index both closed near the unchanged line.

In the bond market, treasuries showed a notable move to the downside after trending higher in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.061 percent.

Looking Ahead

The Fed's monetary policy decision is likely to be in the spotlight next week, although traders are also likely to keep an eye on reports on retail sales, industrial production, import and export prices and housing starts.