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Dow Ends 6-Day Winning Streak, Slips on Week's End

5:44 PM, Dec 27, 2013   |    comments
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Stocks gave back early gains and closed slightly lower Friday as the recent year-end market rally took a breather.

Bond yields continued to rise as the yield on the 10-year Treasury note closed above the 3% mark for the first time since June 2011.

The Dow Jones industrial average ended its six-day winning streak as it fell 1.47 points to 16,478.41. The Standard & Poor's 500 index dropped 0.62 to 1,841.40 and the Nasdaq composite index fell 10.59 points, or 0.2%, to 4,156.59.

The session was marked by light trading as many investors were out on vacation. Only 2 billion shares changed hands on the New York Stock Exchange on Friday, about 40% below the recent average.

Twitter fell $9.56, or 13%, to $63.75. Twitter has soared in recent days, prompting one Wall Street analyst to downgrade the company's stock to the equivalent of "sell," saying the rally was overdone. Even with Friday's sell-off, the social media company's stock is still up 53% this month.

On Thursday, the Dow ended up 48.68 points, 0.3%, to 16,227.76 -- a record high. The S&P 500 closed up 9.09 points, 0.5%, to 1,818.69 -- also an all-time high. And the tech-laden Nasdaq finished up 46.61 points, 1.2%, at 4,104.74. It was the Nasdaq's best close since Sept. 1, 2000.

THURSDAY: Dow, S&P 500 finish at record highs

Stocks have enjoyed one of their best year's in recent memory and look to finish 2013 on a strong note as investors have been encouraged by several recent indicators that the economy is on good footing.

The Dow and S&P 500 are up 2.4% and 2% respectively so far in December, with only two trading days left in the year. For 2013, the S&P 500 is up roughly 29%, its best year since 1997, and the Dow is up 25.8%, its best year since 1996.

No economic data or corporate earnings were released on Friday.

The 10-year U.S. government bond, which briefly touched the key 3% level on Thursday for the first time since September, continued to inch higher Friday. In afternoon trading it was yielding 3.003%, which is its highest yield since July 2011. The increase will translate into higher interest rates on mortgages and other kinds of loans.

It remains to be seen how financial markets will react to rising bond yields. The general consensus is that markets will take the rate rise in stride if it is gradual and orderly, rather than a sharp spike in a short span that boosts fears that yields will skyrocket and hurt the housing recovery and economic growth.

BONDS: 10-year Treasury hits key 3% level

In Asia, Japan's Nikkei 225 rose 4.50 points, or less than 0.1%, to finish at 16,178.94, Hong Kong's Hang Seng index climbed 63.69 points, or 0.3%, to close at 23,243.24 and Shanghai's composite index rose 28.15 points, or 1.4%, to close at 2,101.25.

Major European benchmarks were up as they resumed trading following the Christmas break. Britain's FTSE 100 was up 0.9% to 6,750.87 and Germany's DAX 30 index gained 1.1% to 9,589.39. France's CAC 40 index rose 1.4% to 4,277.65.

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