Stocks waver in muted holiday trading on Wall Street

Stocks drifted to a mixed finish in muted trading on Wall Street Thursday as markets approach the end of 2023.

The broader market remained mostly quiet ahead of the final trading day of the year, though every major index is on track for weekly gains.

The S&P 500 rose 1.77 points, or less than 0.1 percent to 4,783.35. It is on track for its ninth straight week of gains and is up more than 24 percent for the year. The two-month rally has also pushed the benchmark index closer to breaking its all-time high set in January of 2022.

The Dow Jones Industrial Average rose 53.58 points, or 0.1 percent, to 37,710.10.

The Nasdaq composite fell 4.04 points, or less than 0.1 percent, to 15,095.14. It has far outpaced the broader market this year and is on track to close 2023 with a gain of more than 44 percent.

Markets in Asia gained ground. Tokyo’s Nikkei 225 index was an outlier in Asia, shedding 0.4 percent. Speculation over whether and when the Bank of Japan might ease its longstanding lax monetary policy and raise its key interest rate from minus 0.1 percent has kept stocks wobbling in the world’s third-largest economy.

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Markets in Europe fell.

There are few economic indicators out of Washington this week. The latest weekly report on unemployment benefits showed that applications rose last week, but not enough to raise concerns about the labor market or broader economy. The overall jobs market has been strong throughout 2023 and has been a driving force for the economy.

The average long-term U.S. mortgage rate retreated for the ninth straight week to its lowest level since May, according to mortgage buyer Freddie Mac. Mortgage rates have been easing since late October, along with long-term Treasury yields.

The yield on the 10-year Treasury surpassed 5 percent in October, but has also been generally falling since then. It rose to 3.84 percent on Thursday from 3.79 percent late Wednesday.

There was also a lack of big corporate news for investors.

Two higher-end models of the Apple Watch can go on sale again after a federal court temporarily lifted a sales halt ordered by the International Trade Commission due to a patent dispute. Apple rose 0.2 percent.

Technology and communication company stocks had some of the biggest gains. Chipmaker Advanced Micro Devices rose 1.8 percent.

U.S. crude oil prices fell 3.2 percent and weighed down energy stocks. Hess fell 2.6 percent.

Strong profit

Companies are close to wrapping up their latest financial quarter and the next big batch of news will come when they start releasing those results later in January. Overall, companies in the S&P 500 have notched relatively strong profit gains after stumbling during the first half of 2023. That has given Wall Street more hope the economy will remain strong in 2024.

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Analysts polled by FactSet expect companies in the S&P 500 to report earnings growth of 1.4 percent in the fourth quarter and say profit growth should accelerate next year.

Inflation has steadily eased since 2022 and should continue cooling into next year. The Federal Reserve’s preferred measure of inflation fell to 2.6 percent in November from a peak of 7.1 percent in 2022. That has helped improve forecasts for companies worried about inflation squeezing consumers and raising costs.

Economic data over the last few months have raised hopes that the economy can dodge a recession. Wall Street is betting that the Fed is done raising interest rates and will likely shift to rate cuts in the new year. The central bank has held rates steady since its meeting in July, and Wall Street expects it to start cutting rates as early as March.