U.S. Stocks Turn Lower

NEW YORK – U.S. stocks closed mostly lower after a shortened holiday session, although the Dow Jones Industrial Average and S&P 500 index notched their eight-straight weekly gains.

The Dow closed down nearly 11 points, or 0.7%, at 16086, after being up as many as 77 points earlier in the session. On Wednesday, the Dow rose to its fifth-straight record close, and the 44th of the year.

The S&P 500 was down 1.4, or 0.08%, at 1805. The Nasdaq Composite Index added 15 points, or 0.4%, to 4059, closing at its highest level since Sept. 7, 2000.

Activity was muted during shortened trading session, as the Friday after Thanksgiving usually has the lowest trading volume of the year.

“It’s hard to see anything specific to bring stocks down or to hold them back for the rest of the year,” said John Kvantas, who helps manage $16 billion as executive director at USAA. Mr. Kvantas is cautious on U.S. stocks, preferring instead emerging-market stocks, after the big run higher in U.S. markets this year.

new york stock exchangeRetailers’ stocks were in focus, as reports of Black Friday sales started trickling in. Among retailers’ stocks seeing early activity, Dow component Wal-Mart WMT +0.10% rose, with Target and J.C. Penney JCP +1.09% also seeing gains.

Wal-Mart and Target reported strong Thanksgiving Day traffic in stores and online, adding that shoppers were focused on big-ticket electronic products. They were among a number of retailers that opened on Thanksgiving Day in an effort to boost struggling sales in a tight economy and keep up with online retailers.

“Initial reads on Black Friday are strong,” said Matthew Kaufler, portfolio manager of the $1 billion Federated Clover Value Fund. After worry in recent weeks that the holiday shopping season would be weak, Mr. Kaufler said, “it looks like we’ll have a decent holiday for retailers, which is fueling some optimism in the near term.”

Mr. Kaufler said early next year could pose some challenges as the government budget debate returns to the forefront and as companies begin to preview fourth-quarter results.

Apple shares rose to their highest price of the year Friday as it joined in on offering Black Friday deals with a rare sale for its products.

“This is just about momentum right now. And there hasn’t been any bad news to knock the market down,” said Colin Cieszynski, senior market analyst at CMC Markets. “People are generally becoming more pleased with the U.S. economy.”

He said some clients were expressing concerns the market might be overextended, but they weren’t willing to fight the trend, yet.

“At some point, there will be a correction; there always is. But right now, you don’t want to stand in front of a freight train,” Mr. Cieszynski said.

No economic data were scheduled for release. Investors were looking ahead to next week, with the release of manufacturing activity data on Monday and the closely watched monthly employment report on Friday.

The yield on the 10-year Treasury note rose to 2.756% from 2.739% late Wednesday as upbeat data this week boosted bets that the Federal Reserve could pare its bond purchases as soon as December.

Front-month January crude oil futures advanced 1.5% to $93.65 a barrel, after settling at a near six-month low on Wednesday, while gold futures gained 1.2% to $1,252.20 an ounce. The dollar eased slightly against the euro, but rose against the yen.

European markets finished mixed after encouraging euro zone labor and inflation data. The Stoxx Europe 600 was little changed in a quiet session, after rising 0.2% on Thursday to close at a 5 1/2-year high. Unemployment in the euro zone fell to 12.1% in October from a record high of 12.2% in September, beating expectations of an unchanged reading. The number of people without jobs fell by 61,000, the largest amount since April 2011.

In addition, the annual rate of inflation rose to 0.9% in November from October’s 0.7%, helping ease some deflation concerns.

Germany’s DAX 30 index gained 0.2%, France’s CAC 40 finished down 0.2% and the U.K.’s FTSE 100 rose 0.1%.

Separately, Spanish stocks finished lower, despite Standard & Poor’s raising its outlook on Spain’s sovereign debt to stable from negative. The debt is currently rated BBB-, which is S&P’s lowest investment grade rating. Spain’s IBEX 35 closed down 0.3% after trading higher most of the session.

In contrast, S&P cut the Netherlands’ rating to AA+ from triple-A, citing weakening growth prospects. Dutch stocks slipped less than 0.1%. Reaction in bond markets was muted, with Dutch bonds steady and Spanish bond yields modestly lower. Yields fall as prices rise.

Asian markets were mostly lower, with Japan’s Nikkei Stock Average pulling back 0.4%, after rallying 1.8% Thursday to close at the highest level since December 2007.

– WALL STREET JOURNAL

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