US stocks ended a thinly traded session mostly flat yesterday as investors paused after last week’s surge, though continually light volume suggested the market could encounter more choppy trading.
The Nasdaq closed higher for its sixth straight day, helped by strength in Netflix, while the Dow and the S&P 500 ended five-day streaks that marked the best week for equities in two years.
The S&P gained 5.6 per cent last week, rebounding from weakness over the past two months, but concerns about economic growth and the US debt ceiling could temper gains in coming days.
“It’s no real surprise that the market is having a harder time today getting excited, given the big week we just had,” said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management, which oversees about $50.6bn.
In another prospective headwind, Moody’s Investors Service slashed Portugal’s credit rating into junk territory on risks the country will need another bailout before it can return to capital markets. It keeps the euro zone’s debt woes at the forefront even as investors were hopeful for a resolution to Greece’s fiscal crisis.
Equities dipped only slightly on the news, which Luke Rahbari, partner at the Chicago-based Stutland Volatility Group, said had been expected.
“This is more symbolic,” he said, though he added that “in the short term, everything will be pressured... everyone wants to get out of every asset class except cash and reassess after we get more clarity.”
The Dow Jones industrial average was down 12.90 points, or 0.10 per cent, at 12,569.87. The Standard & Poor’s 500 Index was down 1.79 points, or 0.13 per cent, at 1,337.88. The Nasdaq Composite Index was up 9.74 points, or 0.35 per cent, at 2,825.77.
The day’s volume was light, with only 6.04bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47bn. The trend was seen as enduring and the anemic action could exacerbate stocks’ gyrations in the holiday-shortened week, especially with Friday’s non-farm payroll report expected to show tepid job creation in June. Markets were closed on Monday for the US Independence Day holiday.
Last week, moves to avert a debt crisis in Europe helped to lift some of the gloom on Wall Street.