U.S .. stocks closed lower Thursday, snapping a five-day dash that helped drive Dow and S & P 500 out of the review area. But large indices reported robust gains for a third week in a row, as the Federal Bank assured the market that it would remain flexible on interest rates going forward.
How did big benchmarks go?
Dow Jones Industrial Average
fell 5.97 points to 23,995.95, while the S & P 500 index
slid 0.38 points to 2.596.26. Nasdaq Composite Index
[0.145%] throws 14.59 points, or 0.2% to 6,971.48.
For the week, Dow increased 2.4%, S & P 500 gained 2.5% and Nasdaq rallied 3.5%.
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What drove the market?
Although the shares retreated, volatility fluctuated as investors took comfort in speeches by Federal Reserve officials this week as they continued to spread the message that the central bank would be cautious in its approach to raising interest rates this year.
Fed Mayor Jerome Powell reinforced this message Thursday during a discussion at the Economic Club of Washington where he said the central bank would be "flexible" and "patient" on monetary policy.
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Last data showed a poorer inflation with the consumer price index which went down 0.1 per cent in December to mark the first decline in nine months, the Ministry of Labor said Friday. It matched the forecast of economists asked by MarketWatch. The increase in cost of living over the last 12 months decreased to 1.9% from 2.2%, the first time it fell below the 2% key since August 2017.
Investors may also have found a modicum of cheerful on the US China The commercial front after US finance minister Steven Mnuchin told journalists on Thursday night that Vice President Liu Han, the highest financial adviser to President Xi Jinping, would travel to Washington later in January to continue trade negotiations, talks that have been seen by markets such as speeding up this week.
Meanwhile, the partial US government shutdown had entered its 21st day, and the bond was the longest in history. While markets have so far moved away from the drama in Washington, hundreds of thousands of federal workers will not receive a paycheck this week, and economists warn that the economic effects of the closure can grow significantly when the standoff goes on.
What were analysts saying?
Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, told MarketWatch that the weakness of stocks on Friday morning should not shake confidence in what he sees as a sustainable rally ahead.
"We have complained about the decline in December, which was disconnected from economic reality," he said. "When inflation does not convincingly rise above 2%, markets have the right to believe that the Fed will be their friend," he said, adding that Friday's poor inflation reading would give the central bank even more reason to take the patient's approach.
"Shares love that the central bank's policies seem to be in an ultrasound mode," wrote Edward Moya, market director in Oanda, in a note. "Inflation is low and under control and the most important catalyst for Fed's ability to be patient. If we see softer prints, we can see dividend losses and stocks continue their rally."
What stocks were in focus?
Netflix Inc Stocks .
NFLX, + 3.98%
rose 4% after the firm was upgraded to strong purchases from Raymond James's superior.
Chico's FAS Inc .
CHS, + 4.22%
advanced 4.2% after the firm announced the closure of 250 stores, as part of an overhaul, with the aim of improving its online offering and customer service.
Activision Blizzard Inc .
fell 9.4% after the company announced it was entitled to "Destiny" franchise to Bungie Inc. After the move, Benchmark cut its price target on the stock from $ 93 to $ 87, and KeyBanc Capital hit its price target from $ 80 to $ 64.
Stocks of General Motors Co .