Investors Hold Breath Into End of the Year

It was a quiet day on Wall Street on Monday, although the Dow gained 25 points as 2013 drew toward a close.

Stocks managed to hang on to most of their monthly gains through Monday’s session, as the S&P 500 dipped by only 0.2 percent, as it is expected to close-out December with a 2 percent advance, while wrapping-up 2013 with a 29-percent jump, making this year its best since 1997. Monday’s important economic news came from the National Association of Realtors.

The NAR reported that its Pending Home Sales Index (sales not yet closed but agreed-to by contract) increased for the first time in six months for a 0.2 percent advance to 101.7 in November. Unfortunately, economists had been expecting a move by slightly more than one percent.

The Dow Jones Industrial Average (NYSEARCA:DIA) picked up 25 points to finish Monday’s trading session at 16,504 for a 0.16 percent advance. Nevertheless, it was the first time the Dow failed to hit a record intraday high after a seven-session streak of doing so. The S&P 500 (NYSEARCA:SPY) slipped 0.02 percent to close at 1,841, closing-out a five-day streak of record intraday highs. The Nasdaq 100 (NASDAQ:QQQ) declined 0.11 percent to finish at 3,570. The Russell 2000 (NYSEARCA:IWM) retreated 0.04 percent to end the day at 1,160.

On London’s ICE Futures Europe Exchange, February futures for Brent crude oil declined 96 cents (0.86 percent) to $111.22/bbl. (NYSEARCA:BNO). February gold futures declined $17.80 (1.47 percent) to $1,196.20 per ounce (NYSEARCA:GLD). Transports remained stuck in snowbound traffic on Monday, as the Dow Jones Transportation Average (NYSEARCA:IYT) was unchanged from Friday’s close at $131.10.

In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks advanced as the yen weakened to 105.41 per dollar during Monday’s trading session in Tokyo. A weaker yen causes Japanese exports to be more competitively priced in foreign markets (NYSEARCA:FXY). The Nikkei 225 Stock Average advanced 0.69 percent to 16,291 (NYSEARCA:EWJ).

Stocks retreated in mainland China as ongoing concerns about the nation’s financial reform agenda weighed heavily on banking and real estate stocks. The Shanghai Composite Index declined 0.18 percent to 2,097 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index ticked upward by 0.01 percent to 23,244 (NYSEARCA:EWH).

Stocks declined in Europe, as investors took profits at the end of the year following six consecutive days of gains. The Euro STOXX 50 Index finished Monday’s session with a 0.34 percent decline to 3,100 — remaining above its 50-day moving average of 3,033. Its Relative Strength Index is 62.51 (NYSEARCA:FEZ).

Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,786 after dipping 0.02 percent to finish Monday’s session at 1,841. Its Relative Strength Index slipped from 69.30 to 69.08. The MACD is climbing above the signal line, which would suggest that the S&P should resume its advance during the immediate future.

On Monday, five sectors advanced and four sectors declined. The energy sector took the hardest hit, with a 0.71 percent drop.

Consumer Discretionary (NYSEARCA:XLY): +0.45 percent
Technology: (NYSEARCA:XLK): -0.20 percent
Industrials (NYSEARCA:XLI): -0.10 percent
Materials: (NYSEARCA:XLB): +0.07 percent
Energy (NYSEARCA:XLE): -0.71 percent
Financials: (NYSEARCA:XLF): -0.18 percent
Utilities (NYSEARCA:XLU): +0.24 percent
Health Care: (NYSEARCA:XLV): +0.16 percent
Consumer Staples (NYSEARCA:XLP): +0.26 percent

Bottom line: Investors held their breath on Monday, hoping the year would end with the S&P 500 boasting a 29-percent advance for its best year since 1997.

John Nyaradi is the author of The ETF Investing Premium Newsletter.